LG shows huge gaps in earnings from mobile, electronic appliances

LG shows huge gaps in earnings from mobile, electronic appliances. July. 09, 2016 07:25. by 김지현기자 jhk85@donga.com.

LG Electronics made public closure on its preliminary earnings for the second quarter suggesting 584.6 billion won (505 million US dollars) in operating profit on 14.17 trillion won (12.2 billion dollars) in sales on Friday. The sales represent 0.5 percent gain year-on-year and the operating profit 139.4 percent, the highest since the second quarter of 2014. The company’s operating profit ratio stood at 4.2 percent in the second quarter, the highest since the third quarter in 2009.

Earnings by business division were not announced on the day because the figures are preliminary, but most analysts say that all divisions but the mobile communications division has achieved good performance. According to sources in the securities industry, LG Electronics earned operating profit of about 400 billion won (345 million dollars) in home appliances business, and 300 billion won (259 million dollars) in home entertainment business, achieving all-time highs in performance in its history.

The mobile communications division, however, reportedly posted operating losses ranging from 100 billion won (86 million dollars) to 200 billion won (173 million dollars) in the second quarter alone, despite selling all of the initial supply of its flagship smartphone LG G5, which launched in March. The division has continued to incur losses for four consecutive quarters, including the first quarter (minus 202.2 billion won or minus 175 million dollars).