LG Electronics on Thursday said its operating profit jumped 83 percent in the first quarter of this year from a year earlier, on the back of strong home appliance business.
The South Korean electronics manufacturer posted 14.66 trillion won ($12.7 billion) in sales and 921.5 billion won in operating profit for the January to March period. The sales went up 9.7 percent from a year earlier.
(Yonhap)
LG attributes the surge in operating profit to profits from the company’s home appliance and air solution division, known as H&A.
The division reported a 10 percent on-year increase in first-quarter sales to reach 4.64 trillion won, based on strong performances in Asia and Latin America, the company said.
Domestic sales went up 33 percent from a year earlier due to sales of the TWINWash washing machines, air conditioners and some refrigerators, it said.
Other home appliances solely produced by LG, such as the garment steamer known as Styler, and some air purifiers helped boost the profit.
However, LG’s mobile communications division failed to swing back into the black again, posting 200 million won in operating loss in the first quarter.
“The operating loss was significantly reduced compared to the same period last year by nearly 200 billion won,” said a spokeswoman at LG Electronics. “Presales of the G6 smartphone in March in Korea were partly reflected.”
The mobile division posted 3.01 trillion won in sales, up 2 percent from a year earlier, driven by the launch of the premium G6 smartphone and new mass-tier model, the company said.
According to the company, LG shipped out 14.8 million smartphones in the first quarter, up 10 percent from a year earlier. North and Latin America were the two biggest markets for LG’s smartphones.
“While the effects of last year’s reorganization are beginning to bear fruit, price competition in the mass-tier segment and competition from other flagship models are expected to increase this year,” the company said.
LG’s vehicle components division, a new growth engine, reported a 14.5 billion won operating loss, despite a 48 percent increase in sales due to supply transactions with General Motors on the Bolt electric vehicle.
“Continued investments in R&D and growth are expected to continue to affect profitability this year,” the company said.
Led by the premium Signature series, the home entertainment division recorded a record high first-quarter operating margin of 8.8 percent on 4.33 trillion won in sales.
“We forecast a better performance in the home entertainment division, considering the growing popularity of the LG OLED and Ultra HD TV series as well as the new LG Signature OLED TV W,” the spokeswoman said.
By Song Su-hyun (song@heraldcorp.com)