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.
Right-wing political scientist Laura Fernandez on Sunday won Costa Rica’s presidential election by a landslide, after promising to crack down on rising violence linked to the cocaine trade. Fernandez’s nearest rival, economist Alvaro Ramos, conceded defeat as results showed the ruling party far exceeding the threshold of 40 percent needed to avoid a runoff. With 94 percent of polling stations counted, the political heir of outgoing Costa Rican President Rodrigo Chaves had captured 48.3 percent of the vote compared with Ramos’ 33.4 percent, the Supreme Electoral Tribunal said. As soon as the first results were announced, members of Fernandez’s Sovereign People’s Party
MORE RESPONSIBILITY: Draftees would be expected to fight alongside professional soldiers, likely requiring the transformation of some training brigades into combat units The armed forces are to start incorporating new conscripts into combined arms brigades this year to enhance combat readiness, the Executive Yuan’s latest policy report said. The new policy would affect Taiwanese men entering the military for their compulsory service, which was extended to one year under reforms by then-president Tsai Ing-wen (蔡英文) in 2022. The conscripts would be trained to operate machine guns, uncrewed aerial vehicles, anti-tank guided missile launchers and Stinger air defense systems, the report said, adding that the basic training would be lengthened to eight weeks. After basic training, conscripts would be sorted into infantry battalions that would take
GROWING AMBITIONS: The scale and tempo of the operations show that the Strait has become the core theater for China to expand its security interests, the report said Chinese military aircraft incursions around Taiwan have surged nearly 15-fold over the past five years, according to a report released yesterday by the Democratic Progressive Party’s (DPP) Department of China Affairs. Sorties in the Taiwan Strait were previously irregular, totaling 380 in 2020, but have since evolved into routine operations, the report showed. “This demonstrates that the Taiwan Strait has become both the starting point and testing ground for Beijing’s expansionist ambitions,” it said. Driven by military expansionism, China is systematically pursuing actions aimed at altering the regional “status quo,” the department said, adding that Taiwan represents the most critical link in China’s
EMERGING FIELDS: The Chinese president said that the two countries would explore cooperation in green technology, the digital economy and artificial intelligence Chinese President Xi Jinping (習近平) yesterday called for an “equal and orderly multipolar world” in the face of “unilateral bullying,” in an apparent jab at the US. Xi was speaking during talks in Beijing with Uruguayan President Yamandu Orsi, the first South American leader to visit China since US special forces captured then-Venezuelan president Nicolas Maduro last month — an operation that Beijing condemned as a violation of sovereignty. Orsi follows a slew of leaders to have visited China seeking to boost ties with the world’s second-largest economy to hedge against US President Donald Trump’s increasingly unpredictable administration. “The international situation is fraught
RSS