LG Posts Record Q1 Profit, Home Entertainment Up 76%
LG Electronics has posted a 20.2% increase in Q1 operating profit, following strong sales from its premium home appliances and TV range, thereby offsetting weak smartphone revenue.
In line with previous forecasts, Q1 operating profit notched 1.1 trillion won – the highest first quarter result in company history.
It’s the first time the Korean giant has posted an operating profit above 1 trillion won, since 2009.
Sales for the period climbed 3.2% to 15.1 trillion won.
By contrast, net profit dived 12.7% YoY to 729.9 billion won (US$674 million).
The company’s home appliance division saw operating profit climb 8.2% YoY to 553.1 billion won.
LG claims it’s slashed production costs, whilst simultaneously expanding its portfolio of premium products.
Operating profit for LG’s home entertainment division soared a whopping 76.5% to 577.3 billion won. The company cites strong performance from its premium OLED TVs and Ultra HD ranges.
For the division, sales jumped 7.4% year-on-year to 4.1 trillion won.
LG’s mobile communications division has continued to post further losses, notching an operating loss of 136.1 billion won for the quarter.
The results are an improvement from the division’s 213.2 billion won loss in Q4Y17.
It’s the twelfth consecutive quarter LG’s mobile division has posted an operating loss.
For the three months to March 31st, LG states it sold 11.4 million smartphones, a 23% YoY decrease.
The company’s B2B division posted an operating profit of 78.8 billion won, driven by sales of digital signages and solar-light modules.
Concerning second-quarter outlook, LG expects TV sales to further grow, driven by several global sporting events. The company plans to expand its premium OLED TV range in a bid to lift profits.
The Korean giant will seek to turnaround its smartphone division with its new ‘LG G7 ThinQ’, launching next month:
“We expect sales of the G7 ThinQ to be higher than the predecessor”
“We plan to maintain the recovery trend of profitability by expanding sales and cutting costs, although marketing expenditures may rise”.
The company intends to release more products under its artificial intelligence brand name ‘ThinQ’, and has set its sights on the robotic industry for further growth.