SEOUL: South Korea’s LG Electronics yesterday posted a forecast-busting first-quarter profit that more than quadrupled from a year ago as better-than-expected sales of high-end TV offset losses in the mobile phone unit.
Net profit for January to March jumped to 92.6bn won ($89.7m), up 319 percent from 22.1 trillion won in the same period last year, the company said. Operating profit surged 44.2 percent to 504bn won, beating expectations of about 400bn won, while sales rose 1.2 percent to 14.27 trillion won. Sales of its powerful TV unit — which takes the lion’s share of LG’s overall sales — rose only 3 percent to 4.9 trillion won but its operating profit soared to 240.3bn won from 11.2bn won a year ago.
The operating margin also jumped to 4.9 percent from 0.2 percent a year ago, boosted by cost-cutting efforts and the popularity of premium TVs, it said.
Popular high-end models include those using the new organic light-emitting diode (OLED) display technology and ultra high-definition (UHD) TVs.
LG, the world’s second largest TV maker after Samsung, has been pushing TVs using the OLED display that is thinner, consumes less power and offers a sharper picture than conventional flat-panel sets.
The two firms have also stepped up marketing efforts for the UHD TVs that offer remarkably clearer images than other high-definition TV sets. Sales of UHD TVs are expected to grow in the second quarter thanks to robust demand from the fast-growing market in China, LG said.
“Such high-end TVs have far greater margins over 50 percent...and LG’s TV unit appears to have performed well in Chinese and US markets,” Lee Min-Hee, analyst at I’M Investment & Securities.
LG’s struggling mobile unit —the world’s fifth-largest handset maker — racked up an operating loss of 8.8bn won, in a turnaround from a profit of 132.5bn won a year ago. But the loss narrowed from the 43.4bn won deficit posted in the last quarter of 2013. AFP
