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LG Electronics estimates highest Q2 revenue of W19.9tr

July 7, 2023 - 17:34 By Jo He-rim
People walk through LG Science Park in Seoul on Friday. (Yonhap)

LG Electronics reported Friday it expects its second-quarter revenue to increase 2.7 percent to 19.9 trillion won ($15.2 billion) year-on-year, the highest figure for the April-June period in the company’s history.

Its operating profit is expected to jump 12.7 percent on-year to 892.7 billion won, which would be the second highest Q2 record for the firm.

Releasing its preliminary earnings results for the April-June period, LG attributed its record earnings to its efforts to improve the fundamental business structure.

“The revenue reflects the company’s actions to fundamentally improve its business structure by continuously expanding the B2B segment, even as profitability was impacted by the challenging global economic conditions and intensifying competition in the market,” the company said.

The quarterly revenue edged up 2.7 percent, and the operating profit increased 12.7 percent on-year, LG said.

The operating profit estimate was slightly lower than the consensus of 977.9 billion won by local analysts provided by market intelligence FnGuide.

For the second consecutive year, LG is expected to record sales of over 40 trillion won in the first half of the year.

Each business sector’s estimates were not available in Friday’s earnings guidance. LG said its home appliance and air solution business recorded strong profitability on the back of increased sales of products high in demand, such as air conditioners and heat-pump-enabled products, as well as energy storage systems.

LG’s home entertainment business also achieved “meaningful growth” with its content and services on the webOS smart TV platform, despite the challenging global economic conditions, the company said.

Expanded TV sales also drove the premium TV market, LG added.

The tech giant’s vehicle component solutions business is also steadily growing, supported by a high order backlog of auto parts and stable supply chain management, LG said.

Park Kang-ho, an analyst at Daishin Securities, said sales of electric vehicle parts, in particular, have shown a better-than-expected performance, driving the company's overall growth.

"The demand for EVs are on rise and LG is able to diversify its customer base," Park said.

The growth was also backed by its stable business portfolio of three key items, infotainment, e-powertrain and lighting solutions, LG said.

The company added it is introducing the world’s first commercial television sets to feature Apple AirPlay technology support for hotel TVs.

LG’s earnings guidance came at midday Friday. The shares ended trading at 123,000 won on the same day, down 1.84 percent from the previous session’s close.

LG will announce details of its quarterly earnings later this month.