LG Electronics bounces back

Operating profits jump 120%

LG Electronics, the nation’s second largest electronics manufacturer, bounced back in the second quarter riding a robust wave of TV and home appliance sales.

Despite earlier negative forecasts amid sluggish handset sales, the firm’s operating profit for the April-June period increased by 120.5 percent to 349 billion won ($302.95 million) from the same period a year ago.

Its revenue declined by 10.6 percent year-on-year but net profits increased by 46 percent to 159 billion won ($138.02 million). The number was measured following the International Financial Reporting Standard.

There were worries from the market of operating profits plummeting due to the Yeouido-based company’s current lackluster handset sales but brisk sales of televisions and home appliance products helped offset the losses.

The firm’s home entertainment division was the heaviest contributor to the flat-line in operating profits from the previous quarter. The huge popularity of its premium television line-ups in the United States and other markets was boosted by a further improvement in the management of distribution outlets. Operating profits rose 121.1 percent and marked 216 billion won ($187.5 million) from a year ago.

Earnings from LG Electronics’ home appliance division rose 181.6 percent to record 165 billion won ($143.23 million), which the company expects to further increase by the end of the year.

“The American market is the biggest, and 45 percent of the earnings from there comes from our premium refrigerators. Our recently released front-load washing machine is also starting strong,” said a LG spokesperson for its home appliance division.

“The difficulties of selling smartphones are not just a problem for LG Electronics. Other major players around the world such as HTC are going through a troublesome time as well,” said a Seoul-based analyst, who declined to be named. “Last year was the most difficult time for LG, and the good news is that it is maintaining a steady income for the second half of this year.”

The analyst said it will be “tough” times ahead to come in the high-demand season for handsets among the competition, but that the firm has a strong chance for a comeback, especially if its phone launch in September proves to be a “game changer.”

The company is planning a successor to its Optimus LTE 2 to launch early as September to contend in the global market. Like its predecessor, it will utilize user interface developed by the company. <The Korea Times/Cho Mu-hyun>

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