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(LEAD) LG Electronics' net soars in Q1 on premium products

All News 16:21 April 28, 2016

(ATTN: RECASTS headline, lead; ADDS photo, details throughout)
By Kang Yoon-seung

SEOUL, April 28 (Yonhap) -- South Korea's No. 2 tech giant LG Electronics Inc. said Thursday its first-quarter net profit jumped nearly five-fold from a year earlier, apparently helped by improved sales of premium home appliances and TV products.

Net profit came to 198.1 billion won (US$174 million) in the first quarter, compared to the 38.4 billion won posted a year earlier, the company said in its regulatory filing.

Operating profit came to 505 billion won in the January-March period, up 65.5 percent from last year. Sales moved down 4.5 percent over the cited period to 13.3 trillion won.

The result is in line with the earnings guidance released earlier this month.

LG Electronics said its sales moved down on-year due to the slowed growth of the global TV and smartphone market.

Operating profit, however, boasted strong growth as the profitability of the company's home appliances and TV segments improved.

LG Electronics said the home appliance arm posted an operating profit of 407.8 billion won, up 77.7 percent from a year earlier as the company was able to cut production costs, while the portion of premium products in its shipments also increased over the cited period.

The mobile business, which covers smartphones, however, posted an operating loss of 202.2 billion won.

LG Electronics attributed the sluggish returns to the economic slump at emerging markets including South America, while some users delayed their purchase of its handsets ahead of the release of the flagship G5 smartphone.

The marketing expenditures for the promotion of the G5 smartphone, which went on full-fledged sales in the second quarter, were also reflected on the January-March report.

The home entertainment business posted an operating profit of 335.2 billion won, returning to profit from a year earlier. LG said the turnaround was made possible through premium models including Ultra HD TVs.

The home appliances and home entertainment divisions' first-quarter earnings marked record high figures on a quarterly basis.

Shares of LG Electronics closed unchanged from the previous session at 58,200 won on Thursday, when the benchmark KOSPI lost 0.72 percent. The first-quarter result was released after the trading session.

colin@yna.co.kr
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