South Korea's LG Electronics has reported that its net profit for the first quarter of 2010 rose significantly to KRW 675 billion (US$590 million), compared to a loss of KRW 200 billion (US$142 million) a year earlier. Equity method gain of KRW 219 billion (US$191 million) from affiliates helped push up net profit. In particular, LG Display booked an equity method gain of KRW 230 billion (US$201 million). Mobile phone revenues were however hit by lower handset prices and a quiet quarter.
The company expects to see growth in the second quarter of 2010 with the global economic recovery and the start of the high season for air conditioning business.
LG's Mobile Communications division posted a sales revenue decrease of 19.4 percent year-over-year as a result of the low season and a drop in mobile phone prices. Handset shipments reported 27.1 million units while its sales dropped 19.7 percent year-over-year. Operating profit dropped to 0.9 percent year-over-year due to investment and marketing expenses. The company expects to improve sales and profitability through new smartphone launches and expansion of global platform models.
The Home Entertainment division's revenues grew 20 percent from a year ago as demand for flat panel TVs surged, resulting in sales of KRW 5.2 trillion (US$4.5 billion) and operating profit of KRW 182 billion (US$159 million). LCD TV shipments jumped 62 percent to 5.2 million units compared to the same period last year. An aggressive product line-up led by Full LED LCD TVs and a higher proportion of premium products will continue to drive profits for the LG Home Entertainment Company.
The LG Home Appliance Company showed consistent positive performance with eight percent year-over-year growth (33 percent growth on a USD base) on sales of KRW 2.4 trillion (US$2.1 billion) and operating profit of KRW 207 billion (US$ 181 million). Sales from overseas markets grew 34 percent compared to the first quarter of 2009 led by solid sales in China, India and North America. Market demand in the second quarter is expected to slow down but the company will secure profitability and market leadership through aggressive cost reduction and sustainable sales growth.
The LG Air Conditioning Company saw sales decreased six percent (15 percent growth on a USD base) year-over-year to KRW 1.2 trillion (US$1 billion) and operating profit came at KRW 43 billion (US$38 million). Growth led by emerging markets is expected as the peak season approaches and the global economy continues to recover.
The LG Business Solutions Company recorded a strong increase in sales of 15.4 percent year-over-year with sales reaching KRW 1.3 trillion (US$1.1 billion) on stronger demand for IT products and solid demand in emerging markets. Sales of car infotainment products grew with the recovery of the automobile market and monitor sales also picked up, especially in Europe and South and Central America.
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