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.
EUROPEAN TARGETS: The planned Munich center would support TSMC’s European customers to design high-performance, energy-efficient chips, an executive said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said that it plans to launch a new research-and-development (R&D) center in Munich, Germany, next quarter to assist customers with chip design. TSMC Europe president Paul de Bot made the announcement during a technology symposium in Amsterdam on Tuesday, the chipmaker said. The new Munich center would be the firm’s first chip designing center in Europe, it said. The chipmaker has set up a major R&D center at its base of operations in Hsinchu and plans to create a new one in the US to provide services for major US customers,
The Ministry of Transportation and Communications yesterday said that it would redesign the written portion of the driver’s license exam to make it more rigorous. “We hope that the exam can assess drivers’ understanding of traffic rules, particularly those who take the driver’s license test for the first time. In the past, drivers only needed to cram a book of test questions to pass the written exam,” Minister of Transportation and Communications Chen Shih-kai (陳世凱) told a news conference at the Taoyuan Motor Vehicle Office. “In the future, they would not be able to pass the test unless they study traffic regulations
GAINING STEAM: The scheme initially failed to gather much attention, with only 188 cards issued in its first year, but gained popularity amid the COVID-19 pandemic Applications for the Employment Gold Card have increased in the past few years, with the card having been issued to a total of 13,191 people from 101 countries since its introduction in 2018, the National Development Council (NDC) said yesterday. Those who have received the card have included celebrities, such as former NBA star Dwight Howard and Australian-South Korean cheerleader Dahye Lee, the NDC said. The four-in-one Employment Gold Card combines a work permit, resident visa, Alien Resident Certificate (ARC) and re-entry permit. It was first introduced in February 2018 through the Act Governing Recruitment and Employment of Foreign Professionals (外國專業人才延攬及雇用法),
‘A SURVIVAL QUESTION’: US officials have been urging the opposition KMT and TPP not to block defense spending, especially the special defense budget, an official said The US plans to ramp up weapons sales to Taiwan to a level exceeding US President Donald Trump’s first term as part of an effort to deter China as it intensifies military pressure on the nation, two US officials said on condition of anonymity. If US arms sales do accelerate, it could ease worries about the extent of Trump’s commitment to Taiwan. It would also add new friction to the tense US-China relationship. The officials said they expect US approvals for weapons sales to Taiwan over the next four years to surpass those in Trump’s first term, with one of them saying
RSS