LG Electronics reports profit surge on strong sales of premium home appliances

LG Electronics has reported its highest quarterly operating profit in nearly eight years on strong sales of premium home appliances and televisions although its mobile business remained in the red for the eighth consecutive quarter.

The world’s second-largest TV maker after Samsung Electronics said on Thursday operating profit surged 82.4 per cent from a year earlier to Won922bn ($816m) in the first three months of this year as sales increased 9.7 per cent to Won14.7tn. Its net profit more than quadrupled to Won835.7bn.

The South Korean company remains upbeat about its outlook, forecasting a high-single-digit increase in second-quarter revenue from the previous quarter.

The company’s home appliance division posted a record 11.2 per cent operating profit margin in the quarter, thanks to robust sales of high-end washers and refrigerators. Growing demand for large-size TVs also helped the company’s TV division book a Won382bn profit despite higher panel costs.

But LG Electronics shares fell 0.55 per cent to Won72,300 on Thursday as the company’s mobile division posted a Won200m operating loss for the quarter.

LG said its smartphone shipments rose 10 per cent to 14.8m units in the first quarter. Its mobile losses are expected to narrow in the coming quarters as its latest flagship G6 smartphone, which started sales in March, has been well-received by critics while sales of its low-to-mid tier phones are improving.