LG Electronics Inc, South Korea’s second-largest electronics maker, has mirrored the strong performance of its domestic rival Samsung Electronics Co Ltd, after its quarterly profits grew 85% thanks to record sales of mobile phones and flat screens.
For the second quarter net income rose to KRW 494bn ($426m), compared with KRW 267bn ($230m) in the year-ago quarter. Operating profit rose 51% to KRW 395bn ($341m).
Revenues rose 25.2% to KRW 6.02bn ($5.18bn) from KRW 4.67bn ($4.03bn) last year. However the sales fell short of LG’s own forecast of KRW 6.20bn ($5.35bn) to KRW 6.30bn ($5.41bn) due to weak demand for home appliances in South Korea.
Although the domestic market is likely to remain weak in the second half, we expect sales to rise more than 20% from a year ago on strong sales of plasma screens, handsets and digital TVs, LG said in a statement.
Last year LG mainly relied on its flat-screen venture with Royal Philips Electronics NV for most of its profit growth. For this quarter, LG.Philips LCD contributed KRW 353bn ($305m) to LG Electronics, more than half of LG’s pretax profit.
In the mobile phone sector, LG is ranked as the world’s fifth-largest mobile phone-maker, and the South Korean manufacturer has seen an 87% rise in mobile-phone sales to KRW 1.92bn ($1.66bn).
It also shipped a total of 9.9 million units during the second quarter, up 89% from a year go. Looking forward, LG is forecasting that third-quarter mobile-phone sales will rise 45% to 11 million units.
We are confident of selling more than 40 million cell phones this year, Y.S. Kwon, the chief financial officer told analysts.
Sales of displays and media including LCDs made up 36%, or KRW 2.10bn ($1.81bn), of combined revenue. The appliances division earned KRW 1.70bn ($1.46bn), or 29% of combined sales.