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LG Electronics’ performance improves after shutting down smartphone business

After giving up its smartphone business, which recorded losses for a long time, LG Electronics set a new second-quarter record in business performance. Its operating profit soared thanks to strong sales of home appliances and TVs. The company is expected to break through the milestone of 5 trillion won in annual operating profit in 2021.

LG Electronics announced on July 7 that it racked up 17.1101 trillion won in sales and 1.11 trillion won in operating profit in the second quarter of 2021. Compared to the same period of 2020, its sales swelled 48.4 percent, setting a new second-quarter record. The previous high was 15.629 trillion won in sales in the second quarter of 2019.

Its operating profit climbed 65.5 percent during the same period. As a result, it posted an operating profit to sales ratio of 6.5 percent, 2.6 percentage points higher than that of the same period of 2020.

This satisfied market expectations. The market consensus was that the company would post 17,104.9 billion won in sales and 1,122.9 billion won in operating profit in the second quarter.

The earnings estimates announced by the company were calculated in accordance with the International Financial Reporting Standards (K-IFRS). LG Electronics did not disclose specific performances by business division. Net profit based on consolidated financial statements and performances by business division will be announced at a briefing session scheduled for the end of this month.

Stock market experts attributed LG Electronics’ strong business performance to the exit from the smartphone business, which suffered chronic losses. The business results of the Mobile Communications (MC) Business Division will be treated as a discontinued operating loss and will not be included in operating profit or loss starting from the second quarter of 2021. BusinessKorea

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