LG Electronics' headquarters in Yeouido, western Seoul (Yonhap)
LG Electronics on Thursday reported its best quarterly earnings in the first quarter this year, largely driven by the pent-up demand for TVs and home appliances amid the protracted coronavirus pandemic.
For the January-March period, the firm posted 21.11 trillion won ($16.6 billion) in sales and 1.88 trillion won in operating profits, up 18.5 percent and 6.4 percent, respectively, from a year ago. Both were the highest quarterly figures for the South Korean tech giant.
Its home appliance and TV businesses that make up more than half the total revenue drove up the overall earnings as high-priced premium models such as the Signature kitchen brand and OLED TVs helped improve profitability.
Sales at home and other advanced markets such as the US and Europe showed robust growth as their governments spent big to revitalize the staggering economy and encourage consumption last year.
But the company projected a modest slowdown in sales this year amid inflation concerns.
With its home Korean market nearing saturation fast, the company said it would maintain its market share in North America by expanding distribution network with local retailers. In Europe, it said it would bolster responsiveness to uncertainties surrounding geopolitical tensions.
As for Samsung Electronics’ imminent comeback to the OLED TV market, LG showed confidence in maintaining its No. 1 position, saying the crosstown rival’s entry could help scale up the market itself rather than posing an immediate threat to its market share.
The still nascent vehicle component business, one of the company’s growth engine drivers, recorded 1.87 trillion won in sales and 6.3 billion won in operating loss.
Sales increased 8.5 percent from a year ago, led by in-car infotainment and lighting solutions despite chip shortages that have bogged the global automotive industry.
The overall profitability has greatly improved but the company declined to comment on the timing of the break-even point.
By Lee Ji-yoon (firstname.lastname@example.org