Weak sales of televisions and mobile phones have sunk LG Electronics’ second-quarter net profit by 87.3pc from a year earlier.
LG posted consolidated second-quarter 2011 revenues of 4.4trn won (US$13.3bn) a 9.3pc increase from the previous quarter.
After two consecutive quarters of losses, LG turned the corner with a net profit of 108bn won (US$99.6m).
LG reported an operating profit of 158bn won (US$145.8m) this quarter, a 21pc increase from the previous quarter and a 25pc increase from the previous year, which the company attributes to higher profitability for the TV business and reduced losses in handsets.
LG Mobile Communications Company reported an 11.6pc increase in sales in the second quarter compared to the previous quarter, to 3.25trn won (US$3.0bn). While recording a loss of 54bn won (US$49.8m), operating income improved, reducing losses from the previous quarter by almost half. The company is working to strengthen its global competitiveness by launching a mix of competitive smartphones and its continued investment in R&D.
LG Home Entertainment Company posted a quarter-over-quarter sales increase of 2.7pc to 5.4trn won (US$5.0bn), due to higher revenues from LED LCD TVs, its new CINEMA 3D TVs and general business growth in developing markets.
LG Home Appliance Company posted record-high quarterly sales of 2.9trn won (US$2.7bn) from April to June 2011, a 6.9pc increase from the previous quarter and a 6.0pc increase year-over-year, primarily due to strong sales in emerging markets. Although revenue grew and product offerings improved, operating profit of 51bn won (US$47.1m) reflected an increase in raw material costs, appreciation of the Korean won and greater market competition.
The Home Appliance Company intends to maintain its market leadership by introducing more energy-efficient and “smarter” products in the second half while continuing to control costs.
LG Air Conditioning and Energy Solution Company grew its second quarter revenues by 29.2pc quarter-over-quarter and 15.3pc year-over-year to 1.9trn won (US$1.7bn) by focusing on product quality and launching new products with superior features. The company posted a 44bn won (US$40.6m) operating profit, a 13pc increase quarter-over-quarter.
Operating profit margin was 2.3pc in light of higher raw material costs and unfavourable foreign exchange rates.
Photo by Kevin Tsui
