LG Electronics Achieves Record High Revenue of 62.3 Trillion Won Last Year... Operating Profit Down 10% (Comprehensive)

[Asia Economy Reporters Changhwan Lee, Dongwoo Lee] LG Electronics recorded its highest-ever annual sales last year, driven by strong performance in the TV and home appliance sectors. However, operating profit declined due to poor performance in the smartphone business.

LG Electronics announced on the 8th that its total sales last year were preliminarily estimated at 62.306 trillion KRW, up 1.6% from the previous year. This is the highest figure on an annual basis. Operating profit for the same period was 2.4329 trillion KRW, down 10% from the previous year.

In the fourth quarter of last year, LG Electronics posted sales of 16.061 trillion KRW and operating profit of 98.6 billion KRW. Sales increased by 1.8% year-on-year, and operating profit rose by 30.3%.

Although the fourth-quarter results improved compared to the previous year, they fell significantly short of financial investment industry forecasts.

Last year's fourth-quarter sales fell short of the average securities firms' forecast of around 16.5 trillion KRW, and operating profit was well below the expected 280 billion KRW range.

The biggest reason for the results falling short of expectations was attributed to the poor performance of the smartphone business. LG Electronics recorded an operating loss of 322.3 billion KRW in the smartphone division (MC) in the fourth quarter of 2018 alone.

Similarly, the poor performance of smartphones in the fourth quarter of last year is believed to have negatively impacted profitability. The cost of year-end sales promotion campaigns in the TV business also contributed to the profit decline.

However, this year, as smartphone production is relocated from domestic facilities to Vietnam, cost competitiveness is expected to improve, reducing the deficit.

Ko Jung-woo, a researcher at NH Investment & Securities, predicted, "This year, operating profit will continue to grow due to the expansion of premium product lines and the relocation of smartphone production plants."

This content was produced with the assistance of AI translation services.