LG Electronics predicts 61.2% jump in Q2 operating profit

Industry

Published: 05 Jul. 2024, 10:56 Updated: 05 Jul. 2024, 14:48

LG Electronics predicts 61.2% jump in Q2 operating profit

LG Electronics' UNEP campaign displayed at New York's Times Square. [LG ELECTRONICS]

LG Electronics forecasts a 61.2 percent on-year increase in operating profit for the second quarter, setting records for revenue and operating profit in the fiscal period.

In a preliminary earnings report released Friday, the Korean electronics maker said it expects to post an operating profit of 1.2 trillion won ($871 million), exceeding market expectations of 998.1 billion won compiled by market tracker FnGuide.

The company projects a quarterly revenue of 21.7 trillion won, up 8.5 percent on-year, surpassing the market consensus of 21.3 trillion won.

The preliminary forecast does not include detailed breakdowns, but the company anticipates stronger-than-expected earnings derived from balanced growth from its primary and future businesses.

In home appliances, the growth was driven by seasonal sales of air conditioners. In particular, LG’s AI-powered Whisen Stand Air Conditioner sales unit jumped 80 percent compared to the year before.

In the business solutions sector, the company is targeting the premium market with on-device AI notebook series LG Gram and gaming monitors.

LG also anticipates new growth opportunities in its business-to-business (B2B) segment, including heating, ventilation and air conditioning (HVAC) equipment and built-in appliances as these sectors integrate with AI.

In the business-to-consumer (B2C) sector, the electronics maker is focusing on expanding its subscription models for home appliances to lessen the financial burden on consumers for the initial purchase of products while allowing the company to gain steady profits from its subscription plans.

LG plans to accelerate this shift toward strengthening its relationship with its consumers and offering tailored services based on their individual needs.

“Having recently completed the acquisition of the smart home company Athom, the company is set to drive changes in its home appliance business toward personalization and service-oriented perspectives, following its advancements in the TV sector,” LG said in a statement. “In particular, the home appliance business will expedite the transition to offering space-oriented solutions and expand the range of ‘affectionate intelligence’ appliances that empathize with their consumers.”

Final earnings will be released at the end of this month.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]