First it was Apple and Samsung SDI who report a big jump in profits, now LG has reported a 62% jump in second quarter profits, at the expense of Sony who are again tipped to announce record losses.
LG, who are set to roll out new LED and OLED TV’s in Australia soon, along with a premium range of products, has attributed their increase in profits to robust TV and phone sales. The company has also benefited from hefty foreign exchange gains following a drop in the dollar against the local currency.
In the second quarter, ended June 30, net profit rose 62% to US$919 million. Global sales rose 13.8%.
Analysts said the outlook for the company is bright going into the second half, with the strong momentum in its handset and liquid-crystal-display television businesses set to continue.
“Second-half earnings will be better,” said Kwon Sung-ryul, an analyst at Hana Daetoo Securities.
Kwon said he expects handset and flat-screen TV sales and profitability to improve sharply in the third quarter, although air conditioner sales may wane as traditionally demand for those items is strongest in the second quarter.
LG’s home entertainment division, which makes flat-screen TVs and plasma display panels, posted an operating profit of 223.6 billion won in the second quarter, up from the 26.6 billion won a year earlier. Sales rose 19.3%.
“The company expects its flat panel TV shipments in the third quarter to be even higher as demand for premium models,” it said.
LG, which overtook Motorola and Sony Ericsson to become the world’s third-largest seller of cellphones last year, said it expects its handset shipments to increase steadily.
“LG sees the global market declining over 6% year-on-year to around 280 million units in the third quarter but, as for LG, steady growth is expected with the introduction of new high-end devices,” the company said.