24 July 2013 07:56

LG Electronics Second-Quarter Profit Down

LG_L

SEOUL-- LG Electronics Inc. (066570.SE) reported on Wednesday an 8.0% on-year decline in net profit as a result of a squeeze in margins for its television business.

Net profit was 155.5 billion won ($139 million) for the April-June quarter--down from 169 billion won. Operating profit decreased 9.0% to 479.3 billion won from 526.7 billion won.

A better performance from mobile telephones and solid seasonal demand for air conditioners softened the extent of profit decline from the previous quarter when it fell 91%.

The company sold 12.1 million smartphones--more than twice the 5.7 million units shipped a year ago.

Total revenue for the quarter ended June 30 rose 10.1% to 15.23 trillion won.

"Competition in the TV market will stiffen in the third quarter amid bleak demand," the company said in a statement. It will try to improve performance with top-end models like ultra-high definition TVs.

LG is betting increasingly on its mobile unit to drive profits--particularly with its next-generation flagship dubbed the G2 slated for launch in early August. Expectations for TVs remain low because of weak demand.

Demand for LG's fancy but expensive TVs with organic, light-emitting diode screens won't pick up soon because of the price tag, analysts said.

The mobile-telephone unit accounted for 20.5% of sales while televisions accounted for 36.1%. Operating profit margin for mobile phones was 2.0%. Margins for TVs thinned to 1.9% from 5.5%.

Write to Min-Jeong Lee at min-jeong.lee@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

July 24, 2013 02:15 ET (06:15 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.

 

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