SEOUL — LG Electronics announced a 319 percent increase in first-quarter net profit year-to-year. Q1 2014 net profit rose to $86.6 milllion while operating profit of $471.5 million marked a significant improvement from the previous quarter due to improved profibitability from the LG Home Entertainment Company. Unaudited first quarter consolidated revenues of $13.4 billion increased 1.2 percent compared to the same quarter in 2013.
The LG Home Entertainment Company reported first-quarter revenues of $4.63 billion, a three percent increase year-to-year. Operating profit of $224.8 million exceeded expectations due to stronger sales of larger-sized TVs and better cost structure resulting from declining material prices. Revenues are expected to increase in the second quarter with new model launches.
The LG Mobile Communications Company shipped 12.3 million smartphones in the first quarter — comprising 75 percent of all phones shipped — an increase of 19 percent from Q1 2013. LG’s shipment of 5 million LTE smartphones was the most ever in a single quarter, an increase of 79 percent year-over-year, accounting for 41 percent of all smartphone shipments in the quarter compared ot 27 percent for all of 2013. Revenues of $3.19 billion increased six percent year-on-year and operating profit margins rose quarter-on-quarter due to the G Pro 2’s launch and more efficient marketing spending. Higher revnues are expected in the second quarter with the LG G3’s release and wider roll-out of the L Series III.
The LG Home Appliance Company posted strong sales in the Korean market but first-quarter revenue of $2.54 billion was lower year-over-year due to greater competition in North America and unfavorable foreign currency exchange movement in developing markets. Improved cost structuer resulted in first-quarter operating profit of $102.2 million and a profit margin of four percent. Going forward, LG expects revenues for home appliances to increease with the launch of new washing machines and refrigerators.
The LG Air Conditioning & Energy Solution Company reported strong sales of commercial air conditioners in overseas markets with revenues of $1.14 billion in the first quarter and operations profit of $84 million, an increase of nearly 10 percent from the same period last year. LG expects both revenue and profitability to improve with a greater portion of sales from commerical air conditioners and increasing demand for new products such as dehumidifers and air purifiers in Korea.