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LG’s profit is cut in half due to unprofitable TV business
High demand for smartphones LG Electronics did not help the corporation to increase revenues. South Korean manufacturer’s net profit fell 58.5% last quarter due to troubles in the TV market.
In January-March 2021, LG generated net profit of 38.4 billion Korean won ($ 35.9 million) versus 92.5 billion won ($ 86.5 million) a year earlier. Operating income for the period fell 36.2% to 305.2 billion won ($ 285.3 million), while sales remained virtually unchanged at $ 13.9 trillion won (13 billion).
The main concern for LG is the TV business, which posted an operating loss of 6.2 billion won ($ 5.8 million) in the last quarter on a profit of 216 billion won ($ 201.9 million) last year.
According to Reuters, the company is increasing the share of premium models in its TV product range, due to which it hopes to improve margins in this market in the second quarter. At the same time, the manufacturer does not specify the time frame during which it is planned to return the television direction to profit.
LG’s mobile device division posted operating profit of 72.9 billion won ($ 68.2 million) in the first three months of this year, while in the same period in 2021 there was a loss. South Korean vendor has increased sales of smartphones by 26%, to 15.4 million units. LG has never sold so many handsets in the first calendar quarter.