SEOUL: LG Electronics Inc beat market expectations by reporting its strongest quarterly profit in nearly two years, after strong sales of its high-end television sets boosted the South Korean manufacturer’s bottom line.
LG, the world’s second-largest TV maker, on Tuesday said sales of large-screen TVs combined with lower material costs to yield high returns in the first quarter, and that it expects TV revenue to increase in the second quarter.
The company is battling overall weak TV demand by ramping up production of high-end products such as ultra high-definition (UHD) TVs. A lack of UHD-quality content, however, is slowing the format’s adoption, analysts said.
For January-March, LG reported a 44 percent on-year rise in operating profit to 504 billion won ($486.89 million) - the highest since the second quarter of 2012 and eclipsing the 279 billion won mean estimate of 37 analysts polled by Thomson Reuters I/B/E/S.
Shares of LG Electronics, valued at $11.32 billion, were trading up 3.2 percent after the earnings announcement, versus a 0.3 percent in the wider market, following the stronger-than-expected earnings.
LG’s TV division logged profit of 240 billion won, compared with a 11 billion won a year earlier, as a decline in panel prices and reduced marketing needs during a seasonally weak period kept costs down.
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