After a stint of eight long years, LG Electronics posted its best first quarter operating profit, courtesy of staggering sales of essential electronic devices like televisions, refrigerators and washers in Asia and Latin America. LG said on Thursday that its January-March profit was 922 billion won ($816 million), up by 82% from a year ago and in line with its estimates earlier in April.
In the first quarter, revenue rose by 9.7% to 14.7 trillion won ($12.95 billion) which are expected to hit a high-single digit increase in revenue in Q2 versus the previous quarter. These expectations have also been shown an affirmative sign by analysts, who’ve taken in account LG’s efforts to push sales of high-end appliances globally.
Along with that, credit goes to the well-received release of LG’s flagship device, G6. The surmounting mobile losses for the company are bound to narrow in the coming quarters. On one hand, the revenue increased 10% over a year to 4.64 trillion won ($4.1 billion), standalone home appliance and air solutions business division posted a 28% Y-o-Y increase in operating profit to 520.8 billion won ($459 million).
While LG’s appliance division reported an operating profit of 521 billion won ($459 million), LG’s television business booked a 382 billion won ($336 million) of profit for the year. The lift in profits can be demarcated to the integration of new handy features and launch of connected IoT devices. Moreover, consumers now prefer large-screen TVs, which eventually offer a large profit margin to the company.
Speaking in a similar context, Sang-Don Kim, CFO, LG Display said,
There was better than expected response from customers and market to OLED TV like the Wallpaper and CSO that we unveiled at the CES this year and interest and demands for POLED are growing.
We will keep broadening and diversifying our customer base by meeting market expectations with the additional OLED TV capacity at E42 to be completed in Q2 this year.
Although the appliances division is doing well globally, the company still needs to work towards its mobile offerings. Similar to past seven quarters, the eighth quarter has also registered an operating loss. Time time, the loss has amounted to about 200 million won ($176,000). However, it is expected that the next quarter is likely to avoid red terminus, thanks to LG G6’s launch in the market. LG shipped 14.8 million mobile devices in the first quarter, saw its revenue increase 2 percent year-on-year to 3.01 trillion won (approx $2.7 billion).
As for its vehicles division, the revenue jumped 48% from a year earlier to 876.4 billion won. Thanks to its increased parts supplies to General Motors’ electric car Bolt, such a profound growth rate has been achieved.