LG announces second quarter April-June 2012 financial results
28 July, 2012
KARACHI: LG Electronics (LG) reported a 46 percent increase in net profits for the second quarter of 2012 versus the same period a year ago. Despite the continuing recessionary conditions, LG's operating profit in the most recent quarter increased significantly year-over-year.
KARACHI: LG Electronics (LG) reported a 46 percent increase in net profits for the second quarter of 2012 versus the same period a year ago. Despite the continuing recessionary conditions, LG's operating profit in the most recent quarter increased significantly year-over-year.
Stronger performance in home entertainment and home appliances compared to the second quarter last year helped offset profit declines in LG's mobile business.
Due to a combination of more premium products, strategic focus on developing markets and aggressive cost reductions, second-quarter net profit increased 46 percent year-over-year to $138.02 million while operating profit more than doubled to $302.95 million from the same period last year. Revenues, while 5.2 percent higher than in the first quarter, declined from last year's second quarter by 10.6 percent to $11.16 billion due to declining feature phone sales and weak demand for IT products.
LG Home Entertainment Company posted significantly improved operating profit in the quarter compared to the same period in 2011. Due in large part to an increase in sales of more premium products and improved supply chain management, operating profit more than doubled to $187.5 million year-over-year. Sales declined 5.8 percent from the same period a year ago to $ 4.76 billion but increased 2.8 percent from the first quarter of 2012. LG's popular CINEMA 3D TVs will continue to drive sales in the second half as it pushes ahead to become the top global seller in the 3D segment.
LG Mobile Communications Company, after a positive first quarter, struggled somewhat in the most recent quarter with an operating loss of $49.48 million mainly due to greater marketing expenses related to new model launches in the quarter.
Overall revenues declined 28.5 percent year-over-year to $2.01 billion as a result of shrinking feature phone sales but smartphone shipments rose to 44 percent of unit sales, up from 36 percent the previous quarter capitalising on LG's strength in LTE phones. The company is planning to introduce new LTE models in the second half in developed 4G regions including North America and parts of Europe and Asia.
LG Home Appliance Company saw its second-quarter 2012 operating profit nearly triple to $143.23 million from the same period last year on better product mix and improved cost efficiency.
Revenues also increased year-over-year to $2.50 billion from growth in developing markets.
LG Air Conditioning and Energy Solution Company posted operating profit of $60.76 million, a 17 percent increase year-over-year. Revenues increased 21 percent quarter-to-quarter but declined year-over-year to $1.28 billion due to weak residential conditioner sales in Korea and low demand in developed markets.
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