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High-end TV sales boosts LG’s strong first quarter earnings

Beating all market expectations by researchers and analysts, LG has reported its strongest quarterly profit since two years in its Q1 2014 financial earnings results, where its high-end Smart TV sets becomes a boon for the company’s revenue growth.



South Korea-based LG is world’s second-largest television set maker, which said that the sales of large-screen TV’s that made using materials with low costs, such as decline in panel prices and reduced marketing needs during a seasonally weak period, helped the company to yield good returns in Q1 2014. The Korean company also expects even stronger revenue growth from TVs in coming quarter as well.

LG is aggressively pushing its UHD (Ultra High-Definition) TVs to overcome the poor demand in global TV markets and it has increased production of such high-end TVs so that the price could come down to increase sales. It would have sold even more TVs, but the lack of ultra high-definition contents to watch on such TVs is slowing down the sales.

In 2014’s first quarter results, LG reported a 44 percent year-on-year jump in operating profit of $487 million (504 billion won) and it has become the first major operating profit since Q2 2012. This quarter’s earnings beat the expectations of 37 analysts polled by Thomson Reuters I/B/E/S, who estimated 279 billion won ($270 million).

Valued at $11.32 billion, LG’s shares were trading up 3.2 percent following the stronger than estimated financial earnings’ announcement by LG, but the share closed flatter, at 46.43.

In last year’s first quarter, LG had 11 billion won ($10 million) profit and this year the profit has jumped to 240 billion won ($232 million). In a press release, LG said the following:

“Revenues from TV business are expected to increase in the second quarter with new model launches. LG will continue to diversity its premium Ultra HD TV and OLED TV lineup with more sizes and price levels to offset greater competition.”

On another side, LG’s mobile segment reports 9 billion won of operating loss even the company shipped 19 percent more smartphones in Q1 2014 than Q1 2013. LG has shipped 12.3 million smartphone units in first quarter, this year. Decline in prices and weaker domestic market conditions are the reason for the loss, the company stated.

LG hinted at launching its next-gen flagship LG G3 smartphone in second quarter to compete against Apple iPhone 5s (iPhone 6?) and Samsung’s Galaxy S5 and Galaxy Note 4, may be. LG also mentioned about launching L-III series of affordable smartphones in wider markets and expects better second quarter revenue from its mobile division.

[ Source ]

About John W Arthur

John is the head of our IT Security team and he writes about Security, IT news on The Next Digit. He was the Employee of the Year 2013 for his selfless support and efficiently setting up the whole security infrastructure. He also occasionally writes on "IT Sec Pro" Print Media of Sweden. All posts by John

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