LG Report Record Appliance Profit, Mobile Slumps
LG Electronics has reported a 7% year-on-year drop in Q4Y18 revenue to US$13.99 billion, with lower than expected mobile phone sales dampening burgeoning home appliance and entertainment growth.
For the full-year, LG’s ‘home appliance and air solution’ division notched a record $US1.35 billion in profit – the highest in company history.
Divisional full-year revenues climbed 5% YoY to US$17.17 billion, whilst Q4 sales jumped 3% to US$3.84 billion.Home entertainment revenues notched a record full-year profit of US$1.35 billion, following sales of US$14.37 billion. The company credits its premium product portfolio for divisional growth.
For Q4, home entertainment revenue dipped 6% year-on-year.
Going forward, LG states it intends to grow home entertainment revenue and operating profit by focusing on its premium OLED TV and large-screen Ultra HD range.LG’s mobile communications division has continued to struggle, with Q4 revenue plummeting 16% versus the previous quarter to US$1.51 billion. Full-year revenue notched US$7.08 billion.
For the full-year, LG’s mobile communications division post an operating loss of US$700.65 million – the company asserts better material cost control and production efficiencies will offer an improvement.
For 2019, the company expects 5G smartphones and ‘different form factor’ handsets to push its mobile communications business forward.
LG’s business-to-business division saw Q4 revenues dip 11% YoY to US$530.1 million, with full-year revenue notching US$ 2.13 billion.
Q4 operating profit of US$13.2 million is said to have been impacted by import tariffs.
LG will seek to increase unit profitability by diversifying its solar division, and targeting new growth areas for its information display business.