Consumers still love watching TV and using microwaves.
LG Electronics has reported a huge jump of more than 300% in first quarter profits today. Net profit was up to 93bn Korean won (£52m), compared to the 22bn won in the same period last year. What can the results tell us about how LG is performing and what consumers want?
TVs are still big business
LG’s home entertainment arm had sales of 4.95 trillion won, a rise of 2.6% from last year’s Q1 results. Sporting events like the Winter Olympics and the upcoming World Cup in Brazil have no doubt helped LG in this sector, with consumers pining after LG’s curved and Ultra HD TV sets. The home entertainment division posted a Q1 operating profit of 240.3 billion won.
LG’s doing something right with its mobiles
LG’s mobile phone division shipped 12.3 million smartphones in the first quarter, depsite an operating loss of 8.8bn in the first three months. With the incoming LG G3, LG should boost sales even more and it will hope to amend those operating losses. LG will target the Chinese market with higher-end phones, as it struggles to compete with Lenovo’s homegrown budget devices. Last year, LG came fourth in the global smartphone market, with a 4.7% share. The LG G Watch will be released later this year, which will further boost mobile and wearable tech sales.
Home appliances still a big hit with consumers
LG’s home appliance division reported an operating profit of 109.2 billion won, but has no plans to launch new fridges or washing machines in the near future. Here’s one of LG’s talking washing machines.
LG may be doing better than Samsung
Samsung posted a second quarterly fall in a roq as smartphone sales continued to topple for the company. The tech giant reported a 3.3% fall in Q1 operating profit to 8.5 trillion won from the same period last year. However, Samsung is anticipating much better performance with Q2, coinciding the recent release of the Samsung Galaxy S5.