LG posts record Q1 profit without G5 sales
LG has posted 505.2 billion won ($444 million) in operating profit for the first quarter, a rise of 65.5 percent from a year ago.
The company posted 13.36 trillion won in revenue, a drop of 4.5 percent year-on-year due to the shrinkage of the global TV and smartphone market, it said. The results mark its best in two years and don't include sales from the newly-released G5.
Consumer electronics -- mainly home appliances and TVs -- were the main contributors with 742 billion won, a rise of 65.5 percent from a year ago, and the company's record thanks to strong sales of high-priced premium products despite the seasonal market slump.
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The mobile division saw an operating loss of 202 billion won, however, due to a drop in sales of older models. Sales in Latin America and CIS nations fell due to recession in those markets and LG said it has also reflected the marketing costs for the G5 for this quarter.
The G5 was launched globally on March 31 and earnings from the phone will be reflected in the second quarter.
The smartphone is selling 8,000 units per day in South Korea and has shown strong sales globally. It is expected to be the firm's bestseller.
South Korea's second-largest electronics maker has spared no expenses in promoting the phone and has opened a dedicated developers cite for accessories of the modular G5 -- the LG Friends.
LG believes strong sales of the flagship model will allow it to post another record next quarter, as said before in its preliminary guidance.
Competition for market share between manufacturers is to intensify due to the stagnation of growth in the smartphone market. "The mobile division will expand revenue by actively launching our strategic G5 smartphone and expand on new budget-models, and at the same time increase profitability by lowering cost," the company said in a statement.
The firm's vehicle component business saw its revenue grow 55 percent to 592.9 billion won with an operating loss of 15.8 billion won. The company is selling its audio video navigation and telematics solutions.