LG Electronics Inc reported record quarterly profit as mobile-phone sales surged, challenging Motorola Inc as the world’s third-largest handset maker.
Second-quarter net income climbed 84 percent to 706.9 billion won (US$695 million), from 384.6 billion won a year earlier, Seoul-based LG said in a statement yesterday. Revenue increased 22.5 percent to 7.23 trillion won.
Mobile-phone shipments advanced 45 percent as LG’s Viewty, Voyager and Secret models helped meet demand for touch-screen handsets spurred by the success of Apple Inc’s iPhone. LG, which joins Nokia Oyj in posting phone earnings that beat estimates, forecast growth will slow as global economies weaken.
“LG’s earnings look good so far mainly because of the progress in its main business,” said Kim Young-tae, who helps manage about US$400 million at KTB Asset Management Co in Seoul.
Still, “slowing global growth will cool demand for mobile phones and other products,” Kim said.
LG Electronics rose 4.1 percent to close at 113,500 won on the Korea Exchange. That extended this year’s advance to 13.5 percent, the biggest gain among shares of the world’s four largest mobile-phone makers.
Net income missed the 826 billion won median estimate in a Bloomberg survey of 12 analysts after LG booked 170 billion won in currency-related losses and faced a higher tax rate. Profit was helped by contributions from subsidiary LG Display Co, whose earnings tripled last quarter.
Operating income, or sales minus the cost of goods sold and administrative expenses, quadrupled to 634.8 billion won, beating the 613 billion won median estimate in the Bloomberg survey.
Profit at the mobile-phone division, which accounted for 38 percent of revenue last year, doubled to 547.3 billion won, exceeding the median analyst estimate by about 5 percent. LG shipped a record 27.7 million phones during the quarter. Goldman, Sachs & Co estimates LG overtook Motorola in terms of shipments during the second quarter.
Nokia reported earnings and revenue last week that exceeded analysts’ estimates and forecast industry shipments this year may surpass its previous projection of about 10 percent growth.
Lehman Brothers Holdings Inc and JPMorgan Chase & Co have cut their price estimates on LG’s stock this month, citing concerns that a slowing global economy will undermine demand for mobile phones. LG’s profit probably peaked in the second-quarter, James Kim, an analyst at Lehman, wrote in a note last week.
LG said that profitability at its mobile-phone division will decline from the second quarter because of slower demand and rising competition, though margins will remain above 10 percent.
LG’s display division, which sells plasma screens and TVs, posted a 117 billion won loss, narrowing from 265 billion won a year earlier, after sales rose 23 percent.
Profit at the home-appliances division rose 20 percent to 207 billion won on higher sales from the Middle East and Asia, the company said.
DETERRENCE: With 1,000 indigenous Hsiung Feng II and III missiles and 400 Harpoon missiles, the nation would boast the highest anti-ship missile density in the world With Taiwan wrapping up mass production of Hsiung Feng II and III missiles by December and an influx of Harpoon missiles from the US, Taiwan would have the highest density of anti-ship missiles in the world, a source said yesterday. Taiwan is to wrap up mass production of the indigenous anti-ship missiles by the end of year, as the Chungshan Institute of Science and Technology has been meeting production targets ahead of schedule, a defense official with knowledge of the matter said. Combined with the 400 Harpoon anti-ship missiles Taiwan expects to receive from the US by 2028, the nation would have
POSSIBILITIES EMERGE: With Taiwan’s victory and Japan’s narrow win over Australia, Taiwan now have a chance to advance if South Korea also beat the Aussies Taiwan has high hopes that the national baseball team would advance to the World Baseball Classic (WBC) quarter-finals after clinching a crucial 5-4 victory over South Korea in a nail-biting extra-inning game at the Tokyo Dome yesterday. Boosted by three home runs — two solo shots by Yu Chang (張育成) and Cheng Tsung-che (鄭宗哲) and a two-run homer by Stuart Fairchild — the triumph gave Taiwan a much-needed second victory in the five-team Pool C, where only the top two finishers would advance to the knockout stage in Miami, Florida. Entering extra innings with the game tied at four apiece, Taiwan scored
MISSION OF PEACE: The foreign minister urged Beijing to respect Taiwan’s existence as an independent nation, and work together to ensure peace and stability in the region Minister of Foreign Affairs Lin Chia-lung (林佳龍) yesterday rejected Chinese Minister of Foreign Affairs Wang Yi’s (王毅) comments about Taiwan, criticizing China as a “troublemaker” in the international community and a disruptor of cross-strait peace. Speaking at a news conference on the sidelines of the Chinese National People’s Congress, Wang said that Taiwan has always been a territory of China and that it would be impossible for it to become its own country. The “return” of Taiwan to China was the natural outcome of the Chinese people’s resistance against Japan in World War II, and that any pursuit of independence was “doomed
‘UNWAVERING FRIENDSHIP’: A representative of a Japanese group that co-organized a memorial, said he hopes Japanese never forget Taiwan’s kindness President William Lai (賴清德) yesterday marked the 15th anniversary of the Tohoku earthquake and tsunami, urging continued cooperation between Taiwan and Japan on disaster prevention and humanitarian assistance. Lai wrote on social media that Taiwan and Japan have always helped each other in the aftermath of major disasters. The magnitude 9 earthquake struck northeastern Japan on March 11, 2011, triggering a massive tsunami that claimed more than 19,000 lives, according to data from Japanese authorities. Following the disaster, Taiwan donated more than US$240 million in aid, making it one of the largest contributors of financial assistance to Japan. In addition to cash donations and
RSS