LG Electronics’ profit plunges on slow TV sales
SEOUL, South Korea — LG Electronics Inc. said Wednesday its first quarter earnings shrank to one tenth of the year-earlier quarter as its TV business languished, masking a recovery in mobile phone sales.
The company’s January-March net profit fell to 22.1 billion won ($19.7 million) from 247.5 billion won a year earlier.
Sales rose 7 percent to 14.1 trillion won. Operating profit slipped 13 percent to 349.5 billion won.
LG blamed the poor result on lower profit from its TV sales, which offset an improvement in its mobile phone business.
Profit from its flagship Home Entertainment division sank more than 80 percent as it had to sell televisions at lower prices and had higher marketing costs due to heightened competition. LG competes with Samsung Electronics Co., Toshiba Corp., Sharp Corp. and Sony Corp. in the TV market worldwide.
LG’s profit from its handset business more than quadrupled from a year earlier, showing the success of effort to revive its mobile communications business after two years of massive losses.
Its quarterly smartphone sales more than doubled to a record high, putting the company on track to meet its annual sales target. LG has said it aims to increase its smartphone sales by more than 50 percent to 40 million handsets this year.
LG shipped 10.3 million smartphones in the quarter thanks to strong demand for its mid- and low-end phones. But it still lags Samsung Electronics Co. and Apple Inc. especially in the premium smartphone market.
Analysts expect LG to post higher profit in the second quarter as the company expands the availability of its flagship Optimus G Pro smartphones in more countries and rolls out high-end TV models, including the TVs that use advanced displays called OLED.