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2 years ago
LG Elec quarterly profit jumps on robust sales for TVs, appliances
January 26, 2016 / 6:32 AM / 2 years ago

LG Elec quarterly profit jumps on robust sales for TVs, appliances

LG Electronics' company logo is seen at a shop in central Seoul, July 23, 2013.Lee Jae-Won

SEOUL (Reuters) - South Korea's LG Electronics Inc (066570.KS) booked a 27 percent jump in fourth-quarter operating profit, as its high margin TVs and premium washing machines found favour with consumers.

Weaker demand for consumer electronics globally has been clouding the outlook for technology firms such as LG, the world's No.2 television maker behind Samsung Electronics Co Ltd (005930.KS). But a sustained fall in display panel prices likely helped boost the firm's TV margins, analysts said prior to the firm's earnings report .

LG said October-December profit was 349 billion won ($290 million), above a Thomson Reuters StarMine SmartEstimate of 340 billion won derived from a survey of 25 analysts.

But the company reported an unexpected net loss of 140 billion won, which it attributed to unfavourable foreign exchange rates as well as a one-time tax charge taken on its assets.

Operating profit for LG's appliances division more than doubled to 215 billion won, making it the company's top earner for a fifth straight quarter on healthy sales of premium washing machines and refrigerators.

Helped by robust sales of organic light-emitting diode televisions as well as ultra high-definition products, quarterly operating profit for its TV division soared to 109 billion won. That compares with 2 billion won a year earlier and 37 billion won in the previous quarter.

Research firm IHS Technology expects worldwide TV shipments this year to be flat compared with 2015, though shipments of higher-margin ultra high-definition TVs are seen jumping 73 percent.

The firm's mobile division reported an operating loss of 44 billion won, compared with a 78 billion won loss in the third quarter of 2015. The business faces pressure from slowing growth in global demand and fierce competition from the likes of Apple Inc (AAPL.O), Samsung and Huawei Technologies Inc [HWT.UL].

LG said, however, that launch of new flagship devices and greater emphasis on cost-effectiveness will boost profitability for its mobile business this year.

Reporting by Se Young Lee; Editing by Edwina Gibbs

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