LG Electronics has delivered strong quarter two results despite its mobile communications division posting an operating loss, with its home appliance & air solution and home entertainment divisions each reporting the highest quarterly operating profit in LG’s history. Operating margin recorded 4.2 percent, the highest in about seven years.
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The company attributed the growth to robust sales of high-end TVs and home appliances, especially for corporate clients worldwide as well as consumers in European and Asian markets.
LG’s home appliance & air solution unit and home entertainment unit – two of the tech giant’s four core business pillars – posted a record high operating profit of 433.7 billion won and 356.7 billion won, respectively, in the second quarter.
The HAA unit posted 4.7 trillion won in revenue, up 4.8 percent on-year while the HE unit logged 4.16 trillion won in revenue, up 5.7 percent compared to a year earlier.
Its mobile division, however, saw an operating loss of 153.5 billion won ($136 million), due to an increase in marketing costs and poor sales of its flagship G5 smartphone, the company said. Its overall smartphone shipment declined from previous year.
For the mobile business, it expected “intensifying competition” in the second half but will launch the next V series and expand the mid-tier K and X series, and improve its profit model.
The world’s second-largest TV maker behind Samsung Electronics Co Ltd (005930.KS) said in a regulatory filing its April-June profit more than doubled from a year earlier to 585 billion won ($521 million), matching its earlier guidance.
The firm said the third quarter would remain hard for the business though its performance would improve as new products launched.
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LG has struggled for years to increase its smartphone sales after a late entry into the market and has since found itself hemmed in by emerging Chinese rivals such as Huawei and Lenovo.
