Following Apple’s results yesterday, LG Electronics today announced its Q2 FY2013 financial results. Revenues hit KRW 15.23 trillion (US$13.58 billion), a 10.1 percent year-over-year increase, with net profits reaching KRW 156 billion (US$139.04 million), a slight year-over-year drop. Its smartphone division, once a money-losing venture, recorded revenues of KRW 3.12 trillion (US$2.78 billion) and profits of KRW 61 billion (US$54.37 million).
The LG Mobile Communications Company shipped 12.1 million smartphones, setting a new quarterly unit sales record for LG. With the smartphone market getting more competitive, LG saw the average selling price of smartphones fall even as it invested more into marketing.
Despite the challenges, LG expects its L-Series II and F-Series smartphones to drive continued growth while the upcoming LG G2 (to be unveiled on August 7th) will help “increase the company’s product competitiveness.”
LG ANNOUNCES SECOND-QUARTER 2013 FINANCIAL RESULTS
Company Sets New Quarterly Record with Sales of 12 Million Smartphones
SEOUL, July 24, 2013 — LG Electronics (LG) today reported solid positive net income in the second-quarter as a result of improved performance in a majority of its business units. LG’s mobile phone business shipped 12.1 million smartphones between April and June, the highest ever in the company’s history.
Revenues in the 2013 second quarter rose 10.1 percent year-over-year to KRW 15.23 trillion (USD 13.58 billion), reflecting strong sales increases in most of LG’s business units. Second-quarter operating profit of KRW 479 billion (USD 426.92 million) and net profit of KRW 156 billion (USD 139.04 million), while down slightly from the same period last year, improved significantly from the previous quarter.
The LG Home Entertainment Company reported revenues of KRW 5.5 trillion (USD 4.91 billion), an increase of 6.4 percent from the previous quarter and virtually unchanged year-over-year.Second-quarter operating profit of KRW 107 billion (USD 95.37 million) increased from the previous quarter thanks to stronger sales in developing markets and successful new models, but declined compared to the same period last year due to intense competition and slower demand resulting in a lower average selling price. With continuing weak demand globally and expected increased competition, the company is investing in the premium and large-screen TV market with the expansion of Ultra HD TV and OLED TV products in developed markets.
The LG Mobile Communications Company continued to improve its position in the second quarter recording revenues of KRW 3.12 trillion (USD 2.78 billion), an increase of 34.5 percent from the same period last year. The company shipped 12.1 million smartphones in the second quarter, a new quarterly unit sales record for LG. Operating profit increased year-over-year to KRW 61 billion (USD 54.37 million) but declined from the previous quarter as a result of weaker demand in the Korean market, lower average selling price due to increased competition, and higher marketing investments. Shipments from mass-market smartphone models such as L-Series II and F-Series are expected to drive sales growth, while high-end products such as G Pro and LG G2 should increase the company’s product competitiveness.
The LG Home Appliance Company recorded the highest quarterly revenues in its history with sales in the second quarter of KRW 3.19 trillion (USD 2.84 billion), up 10.9 percent from the previous year largely due to improved sales in the United States and emerging markets such as China and Latin America. Second-quarter operating profits of KRW 121 billion (USD 107.84 million) rose quarter-over-quarter but fell compared with the same period last year due to increased R&D investments. LG will focus on continuing to grow its home appliance business by producing differentiated products with improved energy efficiency while further improving its cost structure.
The LG Air Conditioning and Energy Solutions Company reported record-high revenues of KRW 1.73 trillion (USD 1.55 billion) in the second quarter, an 18.4 percent increase from last year’s second quarter and a 42.5 percent increase from the first quarter of 2013. Operating income of KRW 171 billion (USD 152.41 million) rose compared with the previous year and previous quarter, while operating profit margin increased to 9.9 percent largely due to improved product mix and business structure.
2013 2Q Exchange Rates Explained
LG Electronics’ unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending June 30, 2013. Amounts in Korean won (KRW) are translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter — KRW 1,122 per USD (2013 2Q).