LG Electronics’ 2017 revenue is highest everRevenue at LG Electronics last year surpassed 60 trillion won ($56 billion) for the first time in the company’s history as it reported its fourth-quarter earnings on Thursday.
The country’s second-largest consumer electronics producer posted revenue of 61.4 trillion won during the fiscal year of 2017, up 10.9 percent from the previous year, and its operating profit increased 84.5 percent on year to 2.47 trillion won, the highest level since 2009 - largely due to premium home appliances and entertainment products including OLED TVs.
“LG Electronics is showing the tendency of it earnings turning around, despite the strengthened Korean currency and increased spending in the fourth quarter,” said Greg Noh, an analyst at HMC Investment & Securities. “The upward momentum is expected to continue this year.”
To tackle the urgent issue of the U.S. plan to impose steep import tariffs on washing machines, an executive with the Seoul-based company announced during a conference call that the company will accelerate the construction of the washing machine factory being built in Tennessee as much as possible so that it could begin operation sometime between September and October at the earliest.
The production facility’s completion was initially set for early next year.
Asked about tariffs to be slapped not only on complete products but also their parts, he said the company plans to churn out the majority of components at the Tennessee factory to minimize the impact.
“The safeguard restrictions will partially affect profitability at our operation in the United States but its portion isn’t too big and there is a way to tackle the problem by trading off [the loss] with health-related home appliances and premium products,” he said.
During the October-December period last year, revenue at LG’s most lucrative home entertainment division increased 14.2 percent on year to 5.48 trillion won and operating profit shoot up 133.8 percent from the previous year to 383.5 billion won, on the back of robust sales of premium products led by high-end and pricey OLED TVs, despite an increase in seasonal demand for marketing.
Its home appliances and air solutions (H&A) division posted revenue of 4.33 trillion won during the same period, up 6.8 percent on year as local sales of emerging products such as double load washing machines, clothes dryers and Styler clothing care machine went up and the company saw overall growth in central and south America and Asia.
However, operating profit in the unit plunged 81 percent year on year to 80.7 billion as the company allocated a hefty amount of the budget on a premium brand available in North America and Europe - Signature - and preliminary investment in future technologies such as artificial intelligence and robots.
BY SEO JI-EUN [firstname.lastname@example.org]