LG Electronics announced a net profit of KRW 38.4 billion in the first quarter, up 0.3 percent from the year before but rising significantly from the loss of over 205 million reported in the fourth quarter. The operating profit lifted 2.2 percent from the year earlier to KRW 305.2 billion. Revenues were virtually unchanged at KRW 13.99 trillion, with soaring smartphone sales offset by modest revenue declines in TVs.
LG’s mobile division recorded its highest first-quarter revenues since introducing its first Android device in 2010, with shipments rising 26 percent year-on-year to 15.4 million smartphones. Revenues advanced 5 percent to KRW 3.6 trillion and operation profit margins improved both quarter-over-quarter and year-over-year. Sales in North America jumped 66 percent from the year before, while sales in Korea grew 57 percent from the previous quarter with the introduction of the G Flex2 premium smartphone with Plastic-OLED display. The launch of the LG G4 in the second quarter is expected to strengthen the company’s presence in the premium smartphone segment and further improve profitability.
At LG Home Entertainment Company, revenues fell 5 percent year-on-year to KRW 4.44 trillion, pulled down by declining revenues from LCD TVs in North America, Europe, CIS and Latin America compared to the previous quarter. A stronger focus on 4K Ultra HD and OLED TV marketing and increasing demand in Asia and North America for all TV products are expected to improve the outlook for the division in the second quarter.
The LG Vehicle Components Company, created in July 2013, announced its business performance for the first time this quarter. The division recorded revenues of KRW 382.6 billion, mainly from its car infotainment business which includes telematics and audio-video navigation systems. LG said it will continue its investment in R&D, despite an operating loss of KRW 2.4 billion, confident that the market for car infotainment, electric car components and automotive electronic components will grow with the popularity of electric and smart cars.
For Mobile Communications, LG expects the smartphone market to grow continuously, especially for the LTE market, although competition is expected to intensify with the launch of new models in the premium segment and stronger lineups from competitors. Price competition will also sharpen as sales expand in the mass market.