LG Elec quarterly profit jumps on robust sales for TVs, appliances

Local brokerage houses expected a net profit of 525.4 billion won, according to data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency.

LG Electronics Inc. narrowed its net loss in the December quarter, aided by brisk sales of its home appliances but China’s slowing economy is casting a cloud on the company’s prospects.

Its home appliance and and air solution division saw its operating income grow by 57 per cent for the year, with quarterly income of KRW 214.8 billion (£130 million).

By sector, the home entertainment business posted an operating profit of 109.2 billion won in the fourth quarter, rising sharply from 2.1 billion won posted a year earlier on the back of the improved sales of high-end models.

The net loss came to 13.5 billion won (US$11.2 million) in the October-December period, compared to a profit of 389.2 billion won posted a year earlier, LG Display said in a regulatory filing.

Net profit for the full year halved to 249.1 billion won.

LG sold 15.3 million smartphones in the quarter, of which LTE phones made up a record 10.8 million units. The company plans to introduce two new flagship models this year and work on a more cost-competitive value chain in order to improve profitability in 2016.

The vehicle components unit, which produces auto parts, recorded operating profit of 9.7 billion won on revenue of 520.4 billion won in the fourth quarter, logging the first operating profit since the company promoted it to one of its four major divisions in the first quarter of a year ago. Expectations are high that the introduction of the ultra-premium LG SIGNATURE lineup in 2016 will help re-energize the LG brand for home appliances in numerous competitive markets. Amounts in Korean won (KRW) are translated into USA dollars (USD) at the average rate of the three-month period of the corresponding quarter – KRW 1,158 per USD (2015 4Q).