LG Electronics ,who claim that they are the #1 consumer electronics brand in Australia, have reported higher quarterly sales and profits due to strong mobile phone and flat-panel TV sales. In their latest report sales have jumped 22.1 percent to $12.534 billion and operating profit was $843 million, which results in a 6.7 percent profit margin for its fiscal second quarter, ended June 30.
One of the strong performers was the LG mobile communications company which posted record sales of $3.788 billion, up 34.3 percent from the second quarter 2007. From handset business, sales reached $3.695 billion, up 38.6 percent from a year earlier. Operating profit margin improved to 13.9 percent, 14.4 percent in handset division due to growth in high-end models and improvements in operational efficiency, the company said.
However analysts are forcasting that the Companies mobile phone operations have peaked and will be impacted by the new Apple 3G iphone.
Shipment of handsets also recorded the highest in unit sales as well, a total of 27.7 million mainly from North America (33 percent) and emerging markets including Middle East Asia, CIS and Central & South America, thanks to strong sales of “Secret,” “Viewty,” “Venus” and other premium phones.
Sales in the digital appliance company increased 4.9 percent to $3.721 billion year-on-year, and operating margin was 7.2 percent despite challenging business environment such as higher raw material prices, economic slowdown and U.S. market contraction from sub-prime effect.
Sales in the digital display company jumped 37.2 percent to $3.683 billion, powered by a rise in sales of flat TVs, with an 86 percent increase in LCD TVs and 31 percent in plasma TVs from a year earlier. The PDP module sales grew 22 percent. Following profitability turnaround in the previous quarter, operating profit in the second quarter successfully remained profitable at $37.4 million, the company said.
Sales from the digital media company was 2.1 percent lower on year, to $1.201 billion, due to low seasonality, but operating profit and margin increased to $12.8 million, or 1 percent, by a strong effort for cost innovation, LG noted.