LG Electronics Posts Record Profit on LCD TV Sales

LG Electronics Inc., the world’s third-largest maker of liquid-crystal-display televisions, reported record quarterly profit, fueled by demand for flat- panels TVs, and forecast higher sales in the current period.

Second-quarter net income climbed 62 percent to 1.15 trillion won ($917 million), from 706.9 billion won a year earlier, Seoul-based LG said in a statement today. Profit was almost 50 percent higher than the 770.7 billion won median estimate in a Bloomberg survey of 17 analysts.

LG Electronics plans to overtake Sony Corp. in terms of LCD TV shipments this year by offering wireless and energy-saving models. The uncertainty in the global economy will continue in the current period, the company said in a statement today.

“In short, it’s as good as it gets,” said Lee Jin Woo, a fund manager at Seoul-based KTB Asset Management Co., which manages the equivalent to $8 billion in assets. “What’s more encouraging is that increased brand recognition from LG’s handsets is spilling over to other products such as TVs and home appliances.”

Operating profit, including earnings from overseas affiliates, increased 32 percent to 1.13 trillion won. Analysts in the survey projected LG would post income of 936.4 billion won. Operating profit is sales minus the cost of goods sold and administrative expenses.

Outperforming Shares

LG Electronics fell 1.1 percent to close at 131,500 won on the Korea Exchange. The shares have gained 76 percent this year, outperforming the 33 percent advance by the nation’s benchmark Kospi index.

“Market expectations for the third quarter appear to be way too high,” KTB’s Lee said. “The share price may not have too much room to rise as investors have already bought enough, but it won’t decline either given the still strong earnings momentum.”

LG plans to boost revenue by more than 10 percent in the June to September period from a year earlier on higher sales of TVs and handsets, the company said in a statement today.

Profit at LG’s home-entertainment division, which makes TVs and DVD players, increased eightfold to 223.6 billion won. The median estimate from the Bloomberg survey predicted income of 104 billion won. Sales at the business, formed in December by combining LG’s display and media-product operations, rose 19 percent to 4.51 trillion won.

Overtake Sony

The company said last month it aims to increase LCD TV shipments by 70 percent to 18 million units this year and overtake Sony as the second-biggest maker. Suwon, South Korea- based Samsung Electronics Co. is the largest. LG will continue to gain market share in LCD TVs in the second half, Henry Kim, an analyst at Citigroup Inc., wrote in a report in June. Tokyo- based Sony reports earnings on July 30. link....