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The company's smartphone sales decreased by 34% in the first quarter of the year.
What you need to know
- LG's operating profit increased to KRW 1.09 trillion ($921.47 million) in Q1 2020.
- The company's 7.4 percent operating margin during the quarter was the highest in its history for a first quarter.
- Consolidated revenue, however, declined slightly compared to the same period a year earlier.
Just like its compatriot Samsung, LG today announced its financial results for the first quarter of the year. Despite the effect of COVID-19 towards the end of the quarter, LG posted an operating profit of KRW 1.09 trillion ($921.47 million) during the quarter, a 21.1 percent increase over the same period last year. LG also achieved a 7.4 percent operating margin in the first quarter of 2020, the highest in its history for a first quarter.
While operating profit increased year-on-year, LG's consolidated revenue of KRW 14.73 trillion ($12.45 billion) was slightly lower compared with the same period last year. The increase in net profit was driven mainly by strong sales of its home appliances and TVs. The Home Entertainment business saw operating income rise by 31.7 percent year-on-year due to expansions of premium products such as OLED and NanoCell TVs.
LG's smartphone division reported sales of KRW 998.6 billion ($843.9 million) in the first quarter, while operating loss narrowed down to KRW 237.8 billion ($200.96 million). Smartphone sales dipped by 34 percent compared to Q1 2019, mainly due to "supply disruptions from Chinese partners. To buffer the effect of COVID-19 on the business, LG is focusing on increasing production and marketing efficiencies to decrease costs. It remains to be seen if the new design philosophy that it will introduce with the Velvet 5G next month can help boost smartphone sales in the second half of the year.
