LG Post Record Q1 Margins, TV Slumps
LG Electronics has announced its highest first-quarter operating income margin in company history, despite a modest decline in revenue versus last year.
Q1 consolidated revenues notched US$12.4 billion, with operating profit hitting US$921.4 million (KRW 1.09 trillion).
Operating income improved a notable 21.1% from the 2019 quarter – the second time in company history when quarterly operating profit has exceeded KRW 1 trillion.
A record-breaking 7.4% operating margin was also its highest Q1 result in history.
First-quarter home appliance & air solutions division revenue was “virtually unchanged” versus the same time last year, with softer global demand amid the coronavirus pandemic offset by higher sales in Korea for health and hygiene products. Operating profit lift 3.6%.
Increased interested in premium products within the niche (and cost-reduction efforts) also produced a record Q1 divisional operating margin.
LG’s home entertainment division fared a 4.8% YoY slump in Q1 revenue (US$2.51 billion), prompt by slowing global demand amid the coronavirus pandemic.
The company is actively adjusting its proportion of home entertainment premium products, expanding online sales streamlining resources to improve profitability going forward.
The company’s embattled mobile communications division post sales of US$843.9 million, and narrowed it operating loss to managed to narrow its operating loss to US$200.9 million from the previous quarter.
Mobile communications sales dived 34% versus the same time last year, attributed to supply chain disruptions from Chinese partners.
The company is hoping the new LG Velvet 5G smartphone will appeal to customers in Q2, and “mark a new direction.”