LG Electronics net profit down 61% on year in Q1

It is the first time since 2009 for LG Electronics to outrun Samsung Electronics in operating profit.

LG Electroincs' exhibition booth at the World IT Show held at COEX in southern Seoul [NEWS1]

LG Electronics posted a net profit of 546.5 billion won ($408.4 million) in the January-March period, down 61 percent on year.

The figure missed the market consensus of 607.7 billion won compiled by Company Wise.

Quarterly operating profit came in at 1.5 trillion won, down 22.9 percent on year, which is in line with the preliminary figure published by the company on April 7. The figure beat the analyst forecast of 1.1 trillion won.

Sales dipped 2.6 percent to 20.4 trillion won, lower than the market expectation and also in line with its estimate.

It is the first time since 2009 for LG Electronics to outrun Samsung Electronics in operating profit.

Samsung reported a quarterly operating profit of 640 billion won for the first quarter, weighed down by big losses in chips.

For the better-than-expected operating figure, LG Electronics cited strong growth in its business-to-business segments.

The home appliances business made an operating profit of 1.02 trillion won, up 56 percent on year and accounting for 68 percent of the total. Sales rose 0.6 percent to 8 trillion won.

Both operating profit and sales posted record numbers for a first-quarter figure.

The strong performance was thanks to the robust demand for energy-related products such as heat pumps and energy storage systems in the United States and Europe, as companies in the regions brace for tighter environmental regulations.

The vehicle component business reported an operating profit of 54 billion won, up from the previous year’s loss of 6.7 billion won, thanks to strong demand for electric cars. Sales rose 27.1 percent to 2.39 trillion won.

Operating profit for the TV and audio business increased 7 percent to 200.3 billion won, yet sales shrank 17.4 percent to 3.4 trillion won due to a continued demand slowdown driven by the war in Ukraine.

The IT and electronics division saw a 36 percent drop in operating profit and a 21 percent decline in sales.

LG Electronics is forecasting sales growth in the second quarter, in expectation of a seasonal demand boost for air conditioners and strong growth of its automotive business.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]