LG reports drop in sales due to slow uptake of mass-market smartphones overseas

LG Electronics has announced its sales figures for the year indicating revenues of $53.0 billion in 2019, reflecting strong demand for premium home appliances such as LG SIGNATURE and high-growth, category-creating products. The firm’s full-year operating profits of $2.07 billion were strong again in 2019 although 10 percent lower than 2018 due to increased investments in marketing and future technologies.

(TOP: LG Q6 series models. The firm reported a decline in sales figures compared to the same period in 2018 due to slow uptake and sales of mass-market smartphones in overseas markets).

Fourth-quarter 2019 revenues of $13.65 billion were 1.8 percent higher than the same period in 2018 and 2.3 percent higher than the previous quarter while quarterly operating income of $86.5 million was 34.5 percent higher than the final quarter of 2018.

LG’s Home Appliance and Air Solution division had a strong year, reporting full-year 2019 revenues of $18.29 billion, an 11 percent increase from the previous year, and operating profit of $1.7 billion, its highest in history. Quarterly sales of $3.92 billion, the highest fourth quarter in the company’s history, were nearly 7 percent above the same period the previous year due to what the firm terms “healthy demand in North America and Europe” while operating income of $103.86 million increased by 8.5 percent from the same period in 2018.

LG’s Home Entertainment division reported full-year revenues of $13.73 billion, a figure that was relatively unchanged from 2018 while operating income of $833 million declined from the previous year. Fourth-quarter 2019 sales revenues of $3.90 billion also remained unchanged from the same period of 2018 and 18.7 percent higher than the previous quarter, resulting in an operating income of $93.5 million due in large part to increased marketing costs.

LG’s Mobile Communications unit recorded 2019 revenues of $5.07 billion while fourth-quarter sales revenues of $1.12 billion declined from the same period a year earlier due to slow uptake and sales of mass-market  smartphones in overseas markets. A full-year operating loss totaling $858.34 million reflected increased marketing expenses to support flagship devices. This year, LG’s mobile business improvement strategy will focus on the introduction of new mid to premium 5G smartphones and continued cost-efficiency efforts.

The LG Vehicle Component Solutions unit reported full-year 2019 revenues of $4.65 billion), a 27 percent increase from 2018 and the highest annual sales in the company’s history. Quarterly revenues of $1.15 billion were 3 percent lower than the fourth quarter of 2018 as a result of slower auto sales. Despite a 2019 operating loss of $165.6 million, the company expects to benefit from additional cost competitiveness and enhanced profitability as the electronic vehicle market expands in 2020 in response to stronger European environmental regulations.

The LG Business Solutions division recorded 2019 revenues of $2.27 billion with an operating income of $209.8 million. Fourth-quarter revenues of $571.8 million were 13 percent higher than the same period in 2018 while the quarterly operating profit of $56.4 million “remained healthy” as a result of strong demand for premium digital displays and solar modules.

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