LG announces second-quarter 2013 financial results

LG Electronics (LG) treported solid positive net income in the second-quarter as a result of improved performance in amajority of its business units. LG’s mobile phone business shipped 12.1m smartphones between April and June, the highest ever in the company’s history.

Revenues in the 2013 second quarter rose 10.1% year-over-year to KRW15.23 trillion ($13.58bn), reflecting strong sales increases inmost of LG’s business units.

LGProfitSecond-quarter operating profit of KRW479bn ($426.92m) and net profit of KRW156bn ($139.04m), while down slightly from the same period last year, improved significantly from the previous quarter.

The LG Home Entertainment Company reported revenues of KRW5.5 trillion ($4.91bn), an increase of 6.4% from the previous quarter and virtually unchanged year-over-year.

Second-quarter operating profit of KRW107bn ($95.37m) 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 KRW3.12 trillion ($2.78bn), an increase of 34.5% from the same period last year. The company shipped 12.1m smartphones in the second quarter, a new quarterly unit sales record for LG.

Operating profit increased year-over-year to KRW61bn ($54.37m) 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 frommass-market smart phone 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 KRW3.19 trillion ($2.84bn), up 10.9% 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 KRW121bn ($107.84m) 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 KRW1.73 trillion ($1.55bn) in the second quarter, an 18.4% increase from last year’s second quarter and a 42.5% increase from the first quarter of 2013. Operating income of KRW171bn ($152.41m) rose compared with the previous year and previous quarter, while operating profit margin increased to 9.9% largely due to improved product mix and business structure.

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 ($) at the average rate of the three-month period of the corresponding quarter — KRW1,122 per $(2013 2Q).