South Korean technology company LG Electronics announced that its operating profit for the first quarter jumped 65.5% over the same period in 2015 to 505.2 billion KRW, while revenues from sales reached 13.36 trillion KRW. LG Home Appliance & Air Solution Company contributed the most to the good results, the company said. According to her data unit operating profit is 407.8 billion KRW (339.23 million USD) for the quarter, while business with products for the home entertainment has earned 335.2 billion KRW (278.84 million USD) and both have enjoyed significant growth compared to the first quarter of 2015.
Businesses LG’s mobile devices, however, generated an operating loss of 202.2 billion KRW (168.20 million USD), mainly due to larger marketing costs for new flagship LG GP. For its part the business of automotive components generate a loss of 15.8 billion KRW (13.14 million USD), reflecting higher investment in research and development. LG announced that it expects its global sales and profitability to improve in the second quarter. It predicts double-digit growth in revenue and more profit while still relies on its strategy focused on product series LG Signature, smartphone LG G5 TVs and 4K Ultra HD OLED.
LG Home Appliance & Air Solution Company recorded revenues from sales of 4.22 trillion KRW the first quarter, which is 4% more than a year earlier and partly due to higher sales of premium products. Operating profit and operating margin of 9.7% turned out to be the highest in the history of the company’s business with products for the home. Revenues in the domestic market rose by 11% compared to the same period the previous year thanks to the strong performance of washing machines TWIN Wash, high-end refrigerators and air conditioners. The decline in oil prices and unfavorable currency fluctuations negatively affected sales in the Middle East and South America, while sales in North America and Europe remained strong.
The mobile business of LG is generated revenue from sales of 2.96 trillion KRW (2.46 billion USD). This is a 15.5% decline compared to the first quarter of last year. Sales of 13.5 million smartphone proved to be 12% less compared to the first quarter of last fiscal year. According to the company this is due to entering the season of slower sales and a decline in sales of basic models already released due to the great interest in the newly appearing LG G5. LG is adamant that competition in the smartphone market will continue to grow, will lead to a new decline in prices. The company plans to respond to that with a strong global momentum globally its modular phone LG G5 and new models such massive series X.
Revenues of the division with products for entertainment at home have reached 4.33 trillion KRW during the quarter. They were 2.3% lower than those generated in the previous year. The reason for this is the decline in sales of televisions in key markets such as North America and Europe.
Businesses with vehicle components generated 592.9 billion. Korean won during the period, representing 55% growth compared to the same quarter last year. This is due to the expansion of business infotainment products for vehicles. However, the profitability of the division was impacted by higher investment in research and development. LG’s forecast for its automotive business is that there will be greater demand for components for electric vehicles than expected. In turn, the company plans to increase its global presence in the business.