LG Electronics Q1 net income up nearly 50% on robust sales

LG's flag waves at LG's headquarters in Seoul, Jan. 30, 2020. Yonhap

LG Electronics said Thursday its first-quarter net profit jumped nearly 50 percent from a year earlier, driven by record-breaking quarterly sales.

The company posted a net profit of 875.6 billion won ($612.4 million) for the January-March period, up 49.6 percent from 585.4 billion won a year earlier, according to a regulatory filing.

Its revenue rose 7.8 percent on-year to 22.73 trillion won, the highest ever recorded for a first quarter.

Operating income totaled 1.25 trillion won, down 5.7 percent from 1.33 trillion won a year ago.

The figure was 5.4 percent lower than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency. The estimate of net profit was not available.

LG Electronics attributed its steady sales growth to strong performance in its business-to-business (B2B) sectors, including electric vehicle components, subscriptions and heating, ventilation and air conditioning (HVAC) businesses.

The vehicle component division posted record-high first-quarter sales of 2.84 trillion won and an operating profit of 125.1 billion won.

The HVAC division reported 3.05 trillion won in sales and 406.7 billion won in operating profit.

Combined sales of both vehicle component and HVAC divisions rose 12.3 percent in the first quarter from a year earlier, while their operating income soared 37.2 percent on-year.

The company's conventional home appliance business also showed a solid performance, posting 6.7 trillion won in sales and 644.6 billion won in operating profit.

LG Electronics expected that rising global trade tensions may heighten market uncertainty and intensify competition moving forward.

The company said it will maintain its growth momentum by diversifying its home appliance lineup and expanding its new business offerings, including subscription services, to adapt to changing consumer demand.