Economy, Sci & Tech

LG Scores on Operating Profits

LG Scores on Operating ProfitsLG Scores on Operating Profits

South Korea's LG Electronics said on Friday its second-quarter operating profit likely reached a two-year high, with analysts pointing to strong contributions from its mainstay home appliances and television set businesses.

The world's second-biggest TV maker by market share, behind compatriot Samsung Electronics Co. Ltd., said in a regulatory filing that April-June profit was likely 585 billion won ($504 million), compared with the 599 billion won average of 23 analyst estimates in a Thomson Reuters I/B/E/S survey. The result would be the highest quarterly profit since the 610 billion won of the second quarter of 2014.

LG Electronics did not offer any additional details ahead of final results scheduled for late July.

Analysts said ahead of the Friday disclosure that the firm likely saw strong profit from its appliance business due to the sale of premium products and unusually warm weather in certain markets that boosted demand for air-conditioners.

They also said the TV division likely swung to profit, as major sporting events such as the 2016 UEFA European Championship soccer tournament boosted demand for large-sized sets. Weak display panel prices also likely helped boost margins, they said. Some analysts were skeptical about LG Electronics' prospects during the second half of the year, however, as the appliances business enters a seasonally weaker period.

They also said sales of its G5 smartphones have been disappointing and that the mobile division likely reported a fifth consecutive operating loss in April-June. They sold only 2.2 million units.