LG Electronics’ home appliances and TV in boom… KRW 1 trillion operating profit achieved in 9 years
Kim Eun | silverkim@ | 2018-04-27 11:19:05
TV and household appliances
[Digital Times, Kim Eun] LG Electronics posted an operating profit of more than KRW 1 trillion in the first quarter of this year, the highest level ever since 2009.
Both the household appliances (H & A) and TV went up as the sales of premium brands `LG Signature` and `OLED (Organic Light Emitting Diode) TV` increased.
On April 26, LG Electronics reported sales of KRW 15,123 billion and operating profit of KRW 1,107.8 billion for the first quarter of this year. Sales and operating profit were the highest in 1Q. Compared with the same period of last year, they increased 3.2% and 20.2% respectively. Operating profit is the highest since Q2.
The strong performance was led by the HE business headquarters for the TV business and the H & A headquarters for the home appliance business. The H & A division and HE division posted the largest quarterly operating profit of KRW 553.1 billion and KRW 577.3 billion, respectively.
The HE division posted sales of KRW 4,117.8 billion and operating profit of KRW 577.3 billion. Especially, the company recorded an OP margin of 14% in the first quarter of this year and recorded double-digit OP margin for the first time. Revenue grew 7.4% YoY as premium products such as OLED TV and ultra-HD TV increased. Operating profit increased 76.5% YoY due to steadily increasing sales of premium products and improved cost structure.
H & A business division recorded sales of KRW 4.92 trillion and operating profit of KRW 553.1 billion. Domestic sales of new products such as air conditioners and twin washers, as well as new products such as dryers, stylers and air cleaners increased, and sales in Europe, Asia and Latin America grew 9.3% YoY. Operating profit jumped 8.2% YoY on the back of higher sales of high-end products such as the premium LG Electronics brand `LG Signature` and cost reduction.
The MC division headquartered in the smartphone business recorded sales of KRW 2.15 trillion and an operating loss of KRW 136.1 billion. Sales declined YoY due to the launch of the smartphone `LG G7 Thinking` in 2Q. The operating deficit continues to decline. Last year, the operating loss at the MC division soared to KRW 134.2 billion in the second quarter and KRW 375.3 billion in the third quarter, down from KRW 213.2 billion in the fourth quarter to KRW 100 billion in the first quarter of this year. Sales were reduced due to the lack of launching of new strategic smartphones in 1Q, but marketing costs decreased.
The VC division posted sales of KRW 840 billion and an operating loss of KRW 17 billion. Sales in the automotive infotainment business declined by 0.8% YoY due to a temporary decline in finished car sales from some of its flagship dealers. The preliminary investment led to a slight operating loss.
By Kim Eun silverkim@
[ copyright ⓒ The Digitaltimes ]
[Digital Times, Kim Eun] LG Electronics posted an operating profit of more than KRW 1 trillion in the first quarter of this year, the highest level ever since 2009.
Both the household appliances (H & A) and TV went up as the sales of premium brands `LG Signature` and `OLED (Organic Light Emitting Diode) TV` increased.
On April 26, LG Electronics reported sales of KRW 15,123 billion and operating profit of KRW 1,107.8 billion for the first quarter of this year. Sales and operating profit were the highest in 1Q. Compared with the same period of last year, they increased 3.2% and 20.2% respectively. Operating profit is the highest since Q2.
The strong performance was led by the HE business headquarters for the TV business and the H & A headquarters for the home appliance business. The H & A division and HE division posted the largest quarterly operating profit of KRW 553.1 billion and KRW 577.3 billion, respectively.
The HE division posted sales of KRW 4,117.8 billion and operating profit of KRW 577.3 billion. Especially, the company recorded an OP margin of 14% in the first quarter of this year and recorded double-digit OP margin for the first time. Revenue grew 7.4% YoY as premium products such as OLED TV and ultra-HD TV increased. Operating profit increased 76.5% YoY due to steadily increasing sales of premium products and improved cost structure.
H & A business division recorded sales of KRW 4.92 trillion and operating profit of KRW 553.1 billion. Domestic sales of new products such as air conditioners and twin washers, as well as new products such as dryers, stylers and air cleaners increased, and sales in Europe, Asia and Latin America grew 9.3% YoY. Operating profit jumped 8.2% YoY on the back of higher sales of high-end products such as the premium LG Electronics brand `LG Signature` and cost reduction.
The MC division headquartered in the smartphone business recorded sales of KRW 2.15 trillion and an operating loss of KRW 136.1 billion. Sales declined YoY due to the launch of the smartphone `LG G7 Thinking` in 2Q. The operating deficit continues to decline. Last year, the operating loss at the MC division soared to KRW 134.2 billion in the second quarter and KRW 375.3 billion in the third quarter, down from KRW 213.2 billion in the fourth quarter to KRW 100 billion in the first quarter of this year. Sales were reduced due to the lack of launching of new strategic smartphones in 1Q, but marketing costs decreased.
The VC division posted sales of KRW 840 billion and an operating loss of KRW 17 billion. Sales in the automotive infotainment business declined by 0.8% YoY due to a temporary decline in finished car sales from some of its flagship dealers. The preliminary investment led to a slight operating loss.
By Kim Eun silverkim@