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LG Reports Higher Revenue, Record Smartphone Sales

Seoul — LG Electronics reported higher fiscal second quarter revenue on record smartphone unit sales, but slightly lower operating and net profits.

LG said its mobile phone business shipped 12.1 million smartphones between April and June, the highest ever in the company’s history.

Revenues in the 2013 second quarter rose 10.1 percent year-over-year to $13.6 billion reflecting strong sales increases in most of LG’s business units.

Second quarter net profit was 156 billion KRW ($139.04 million), while down slightly from the same period last year’s 169 billion KRW.

Second-quarter operating profit of 479 billion Korean won (KRW) ($426.92 million) was down from the prior year’s fiscal second quarter operating profits of 527 billion KRW.

The LG Home Entertainment Company reported revenues of $4.91 billion, an increase of 6.4 percent from the previous quarter and virtually unchanged year-over-year. Second-quarter operating profit of 107 billion KRW ($95.37 million) increased from the previous quarter thanks to stronger sales in developing markets and successful new models, but declined compared to the same period last year due to intense competition and slower demand resulting in a lower average selling price, LG reported.

With continuing weak demand globally and expected increased competition, LG said it is investing in the premium and large-screen TV market with the expansion of Ultra HD TV and OLED TV products in developed markets.

The LG Mobile Communications Company continued to improve its position in the second quarter recording revenues of 3.12 trillion KRW ($2.78 billion), an increase of 34.5 percent from the same period last year. LG shipped 12.1 million smartphones in the second quarter, a new quarterly unit sales record for the company.

Operating profit increased year-over-year to 61 billion KRW ($54.37 million) but declined from the previous quarter as a result of weaker demand in the Korean market, lower average selling price due to increased competition, and higher marketing investments. Shipments from mass-market smartphone models such as L-Series II and F-Series are expected to drive sales growth, while high-end products such as G Pro and LG G2 should increase the company’s product competitiveness.

The LG Home Appliance Company recorded the highest quarterly revenues in its history with sales in the second quarter of 3.19 trillion KRW ($2.84 billion), up 10.9 percent from the previous year largely due to improved sales in the United States, among others.

Second-quarter operating profits of 121 billion KRW ($107.84 million) rose quarter-over-quarter but fell compared with the same period last year due to increased R&D investments. LG will focus on continuing to grow its home appliance business by producing differentiated products with improved energy efficiency while further improving its cost structure, the company said.

The LG Air Conditioning and Energy Solutions Company reported record-high revenues of 1.73 trillion KRW ($1.55 billion) in the second quarter, an 18.4 percent increase from last year’s second quarter and a 42.5 percent increase from the first quarter of 2013.

Operating income of 171 billion KRW ($152.41 million) rose compared with the previous year and previous quarter, while operating profit margin increased to 9.9 percent largely due to improved product mix and business structure, LG noted.

LG said amounts in KRW are translated into U.S. dollars at the average rate of the three-month period of the corresponding quarter — KRW 1,122 per USD (2013 2Q).