Q2 2017 Earnings Announcement... Revenue 14.5514 trillion won, Operating Profit 664.1 billion won
Maintaining high profitability driven by expanded OLED TV sales and improved cost structure

LG Electronics announced that it recorded consolidated revenue of 14.5514 trillion won and an operating profit of 664.1 billion won in the second quarter. Revenue and operating profit increased by 3.9% and 13.6%, respectively, compared to the same period last year.

Looking at the performance by business division in the second quarter, the Home Appliance & Air Solution business recorded sales of 5.2518 trillion won and an operating profit of 465.7 billion won. Sales increased by 11.7% year-on-year, driven by strong sales of new growth products such as air purifiers and dryers—in addition to air conditioners and washing machines—in the Korean market, as well as solid performance in the North American market. Operating profit rose by 7.4% year-on-year, despite rising raw material prices and increased marketing costs, thanks to increased sales and the launch of new models.

The Home Entertainment business recorded sales of 4.2349 trillion won and an operating profit of 343 billion won. Sales increased by 1.9% year-on-year as sales of premium TVs, such as OLED TVs and Ultra HD TVs, rose despite a declining trend in TV demand. Although operating profit decreased slightly compared to the same period last year due to rising panel prices, the company maintained high profitability with an operating profit margin of 8.1%.

The Mobile Communications business, which recorded sales of 2.7014 trillion won and an operating loss of 132.4 billion won, fell 21.0% year-on-year due to sluggish sales of premium products, and increased marketing costs for the global expansion of the G6 led to an operating loss.

The Vehicle Components business recorded sales of 882.6 billion won and an operating loss of 16.4 billion won. Sales increased by 38.0% compared to the same period last year, driven by the addition of new clients in the automotive infotainment business and expanded sales of electric vehicle components due to strong sales of GM's Chevrolet Bolt EV. However, a slight operating loss persisted as investments in advanced technologies for future growth continue.

Demand for home appliances is expected to increase, centered on North America and Europe.

In the home appliance business, demand for new growth products such as air purifiers and dryers is expected to continue increasing in the Korean market, while demand for appliances is projected to rise, particularly in North America and Europe, driven by the moderate recovery of the global economy. The company plans to maintain a stable profit structure by expanding the global launch of premium products, such as the Knock-on Magic Space refrigerator and TwinWash washing machine, and by securing continuous cost competitiveness.

While demand in the TV market is expected to remain stagnant, demand for premium products is projected to expand. In preparation for the peak season in the second half of the year, we plan to maintain stable profitability by conducting marketing activities centered on premium products.

In addition, the plan is to increase sales by reinforcing the family model lineup of the strategic smartphone G6 and successfully launching the successor to the V20, as well as the Q6, which inherits the design and convenience features of the G6. The automotive parts market is expected to expand further as competitive electric vehicle models are launched, primarily in the U.S. and Europe. Building on the successful launch of GM's 'Chevrolet Bolt EV', the VC Business Division plans to expand its business in earnest.