Investing.com -- LG Energy Solution (KS:373220) shares hit a near 4-month high on Thursday reported stronger-than-forecast preliminary third-quarter profit, with earnings boosted by U.S. incentives and improving demand for energy-storage systems.
Shares rose 4.09% to 407,000 won, their highest level since June 18, sharply outperforming a 0.6% fall in the broader KOSPI index.
Operating profit came in at 756 billion won ($564 million) for the three months ended September 30, more than double the 365.5 billion won Bloomberg consensus estimate, implying a beat of about 107%. Revenue is expected to rise 59% to 9.6 trillion won, according to the company's regulatory filing.
The preliminary earnings were supported by U.S. production tax credits as LG Energy Solution expands energy-storage system production in the country, as well as incentives for American-made electric-vehicle batteries.
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The restart of production at the company's joint-venture facilities in North America provided additional support, while a pickup in EV shipments to Europe also helped the quarter.
LG Energy Solution has been increasing its U.S. production to benefit from the Advanced Manufacturing Production Credit, while shifting some capacity toward energy-storage systems as global demand for its EV batteries softens.
The company supplies batteries to major automakers including Tesla, General Motors and Hyundai Motor and has been grappling with a prolonged slowdown in EV demand.
LG Energy Solution has been pivoting toward energy-storage systems, where demand is surging as electricity requirements from artificial-intelligence data centers rise. The company is expanding ESS production in the U.S. to capture that growth while offsetting weaker EV battery demand.
The earnings guidance includes the impact of U.S. production tax credits. Excluding those credits, LG Energy Solution would have posted operating profit of 339.1 billion won, underscoring the extent to which the incentives supported reported profitability.
LG Energy Solution is scheduled to release its detailed third-quarter results on November 3.
Original Article
LG Energy Solution shares hit near 4-month high after Q3 profit more than doubles
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