LG Electronics Posts Massive Profit Jump Despite Smartphone Sales Slump

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By Agence France-Presse | Updated: 28 April 2016 16:17 IST
Booming sales of home appliances and televisions helped South Korea's LG Electronics report a surge in first-quarter profits Thursday, despite a continued slump in smartphone sales.

Net income for January to March amounted to KRW 198 billion ($173.9 million or roughly Rs. 1,156 crores), up 415 percent from a year ago, the Seoul-based company said in a statement.

The tech giant produces a range of consumer electronics from air conditioners to TVs and mobile phones.

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Robust sales of top-of-the-line refrigerators and washing machines drove up profits in the home appliances unit, while a four-fold jump in sales of high-end Oled televisions did the same for the TV unit.

Aggressive cost-cutting efforts and falling display panel prices helped boost profit margins, the company said.

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But the company's embattled mobile business slipped into the red, racking up an operating loss of KRW 202.2 billion compared to a profit of KRW 56.8 billion a year ago.

An economic downturn in emerging markets like central Asia and Latin America sapped demand for the company's mid- and low-end handsets.

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And high-end smartphone sales also suffered, the company said, partly due to consumers waiting for the launch at the end of March of the new version of its flagship G5 handset.

The mobile division has a lot riding on the success of the G5, which was the subject of a costly marketing campaign.

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LG said it had shifted 1.6 million units of the smartphone in April.

LG has struggled for years to increase its smartphone sales after a late entry into the market dominated by Samsung and Apple.

It has since found itself hemmed in by emerging Chinese rivals such as Huawei or Lenovo.

 

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