LG has released its Q1 2012 numbers, and there's plenty of good news to go around, with TV profits that nearly doubled and profit from cellphones for the second quarter in a row following six straight quarters of losses. Despite slightly lower sales, more of the units that did sell had higher prices and made more profit. In its press release, the company claimed to have "turned the corner" with a net profit of $215 million, blaming the slower sales of TVs on the European economy and cellphones on declining featurephone sales. We don't have specific numbers, but it called out the popularity of the Optimus LTE and Optimus Vu as part of the reason for increased revenues. Of course, the year is only just getting under way, and the company is expected to introduce its first 55-inch OLED HDTV soon, as well as quad-core smartphones and a new L-style series of phones. Before that however, it will have to deal with the competition from fellow Korean giant Samsung which will report its earnings later this week and has a few high profile releases up its sleeves as well. There's more details in the press release after the break, and PDF linked below.
LG ANNOUNCES FIRST-QUARTER 2012 FINANCIAL RESULTS
In the Black, Company Reports Significant Improvement by
Focusing on Higher Margins and Efficient Operation
SEOUL, Apr. 25, 2012 -- LG Electronics Inc. (LG) today announced that after two consecutive quarters of net losses, the company has turned the corner with a net profit of KRW 243 billion (USD 214.9 million), a direct result of the company's efforts to innovate in all key business units and focus on high performing products.
Unaudited consolidated financial results, based on IFRS (International Financial Reporting Standards) for the quarter ending March 31, 2012, showed consolidated revenues of KRW 12.2 trillion (USD 10.8 billion) with an operating profit of KRW 448 billion (USD 396.1 million). This compares favorably to the consolidated operating profit of KRW 280 billion for all of 2011.
LG Home Entertainment Company posted significantly improved operating profit in the quarter, compared with the same period a year ago. Sales, while strong at KRW 5.3 trillion (USD 4.7 billion), declined by 6.8 percent compared with the first-quarter of 2011, largely due to the a sluggish European economy. Due in large part to the popularity of new products such as CINEMA SCREEN 3D Smart TV in the Korean market and improvements in supply chain management, operating profit nearly doubled to 217 billion (USD 191.9 million) from the same period the previous year. LG will leverage upcoming big ticket sporting events and the global roll-out of LG's redesigned 2012 TV models to stimulate higher demand for its Home Entertainment products.
LG Mobile Communications Company saw operating profit more than triple quarter-over-quarter from KRW 12 billion to KRW 39 billion (USD 34.5 million) as a result of a better product mix and an increase in the proportion of smartphone sales. Overall revenues declined 14 percent year-over-year from KRW 2.9 trillion to KRW 2.5 trillion (USD 2.2 billion) as a result of declining feature phone sales but smartphone revenue increased due to the popularity of Optimus LTE and Optimus Vu: in the home market. The company expects to strengthen its smartphone line-up even more in the second quarter with the introduction of its L-Style series and quad-core smartphones.
LG Home Appliance Company's first-quarter 2012 operating profit increased 48 percent from the same period last year to KRW 152 billion (USD 134.4 million) thanks to higher average sales price, better product mix and cost efficiency. A 2.7 percent decrease in revenues year-over-year, to KRW 2.5 trillion (USD 2.2 billion), primarily reflected a slowdown in China and developed markets. Despite continued sluggishness in major markets and a rise in the cost of raw materials, the company will continue to efficiently allocate resources and develop differentiated products such as the Blast Chiller refrigerator.
LG Air Conditioning and Energy Solution Company saw operating profit more than double from the same period last year to KRW 81 billion (USD 71.6 million) thanks to new high-end products and cost structure improvements. First-quarter revenues were essentially flat, declining 1.2 percent year-over-year to KRW 1.2 trillion (USD 1.1 billion). LG is optimistic that government policies to promote the usage of energy-efficient products in homes and businesses will create new growth opportunities for the company, along with highly efficient commercial air conditioners.
2012 1Q Exchange Rates Explained
LG Electronics unaudited earnings results are based on IFRS and amounts in Korean Won (KRW) are translated into US Dollars (USD) at the average rate of the three month period in each corresponding quarter: KRW 1,131 per USD (2012 1Q) and KRW 1,121 per USD (2011 1Q).
Earnings Conference and Conference Call
LG Electronics will hold a Korean language earnings news conference on April 25, 2012 at 16:00 Korea Standard Time at the LG Twin Tower Auditorium (B1 East Tower, 20 Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea). An English language conference call will follow on April 26, 2012 at 10:00 Korea Standard Time (01:00 GMT/UTC). Participants are instructed to call +82 31 810 3069 and enter the passcode 9084#. The corresponding presentation file will be available for download at the LG Electronics website (www.lg.com/global/ir/reports/earning-release.jsp) at 13:30 on April 25, 2012. Please visit http://pin.teletogether.com/eng/ and pre-register with the passcode provided. For those unable to participate, an audio recording of the news conference will be available for a period of 30 days after the conclusion of the call. To access the recording, dial +82 31 931 3100 and enter the passcode 142650# when prompted.
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