LG Electronics has grown accustomed to living in the shadow of regional and global arch-rival Samsung, but for the past few quarters, both chaebols have been sensationally successful in their strongest business areas, breaking record after record.
While Samsung derives most of its revenue nowadays from sales of memory chips, mobile processors and smartphones, LG’s handset division continues to struggle, offset by the rising popularity and profitability of the company’s washing machines, air conditioners, dryers, air purifiers and especially TVs.
For the first time in history, LG’s two largest business units yielded a combined quarterly profit of over 1 trillion won. That led to total company gains of KRW 1.1 trillion (USD 1.03 billion) during Q1 2018 on sales of KRW 15.12 trillion ($14.1 billion).
Operating income surged more than 20 percent year-on-year, with sales up 3.2 percent from Q1 2017, and both scores representing new all-time records for the first quarter, as well as LG’s best overall results since Q2 2009.
Of course, we’re far more interested in the “LG Mobile Communications Company” than home appliance and home entertainment divisions. Once again, smartphones are the Achilles’ heel of this otherwise well-oiled organization, losing around $127 million between January and March.
Quarterly sales declined from both Q1 and Q4 2017, to just $2 billion or so, but LG blames that on a “revised launch strategy”, also highlighting the aforementioned operating deficit was lower than USD 192 million losses posted in the October – December 2017 timeframe. Looking ahead, the as-yet unreleased G7 ThinQ is expected to yield “positive results”, helped by the launch of a new Software Upgrade Center for “higher-quality customer support.”