South Korea’s LG Electronics said Wednesday (25 July) its second-quarter net profit surged 47% from a year earlier, thanks largely to booming sales of flat-screen televisions and home appliances.
The world’s second-largest flat-screen TV maker by shipments after Samsung Electronics reported net profit of 159 billion won ($138.2 million) for April-June, up from 108.44 billion won a year earlier.
Operating profit more than doubled to 349 billion won from the same period last year.
However, its cellphone business – a segment the company has flagged as a strong pillar of growth – swung to a loss in the three-month period after remaining in positive territory for the previous two quarters.
The reversal was blamed on high marketing costs for promoting its new handsets and squeezed margins due to the weaker euro.
Revenues fell 10.6% from a year earlier to 12.86 trillion won, mainly because of declining feature phone sales and weak demand for IT products.
Despite the typically-strong selling season for consumer electronics in the second half of every year, analysts expect LG to report weaker profit in the third quarter to September.
LG’s chronic weakness in the mobile business was likely to persist throughout the year amid mounting rivalry from lower-end smartphone competitors and the emergence of more high-margin devices from bigger rivals, they said.