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.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College