LG rebounds on Optimus G series

Models pose with LG Electronics Optimus G Pro smartphones during a launch event at its headquarters in Yeouido in February. / Courtesy of LG Electronics

By Kim Yoo-chul

LG Electronics has shown clear signs of bouncing back thanks to brisk sales of its Optimus G series.

``The recovery in handsets that management had promised is finally showing signs of realization. LG Electronics now has competitive offerings focused on high, mid and low-end segments of the market. This is clearly paying dividends in volume growth, revenue and profit,’’ said Sanford C. Bernstein senior analyst Mark Newman, Thursday.

The recovery in smartphones is not the only factor lifting the consumer electronics giant. It is still ranked second in the TV market and its advanced models have made it overtake rivals in Japan and China.

``We expect a meaningful recovery in LG Electronics’ TV business in the second quarter of this year as new model launches improve overall average selling price (ASP),’’ Newman said.

He added that the firm’s home appliances division is continuing to meet expectations and specifically its air-conditioning business shows signs of ``fundamental improvement.”

He thinks LG’s home appliances division appears to be performing ``reasonably well.’’

Improving product mix and continued growth in emerging markets helped the division to sustain its margin levels.

``The air-conditioning division is showing a healthy recovery. LG’s improving brand image continues to help product mix and profitability. We continue to believe the air-conditioning business will focus more on profitability with improved mix and productivity, thus slightly increased its long term margin projections,’’ the researcher said.

Boosted by a clear sign of recovery, LG Electronics is projected to earn total revenue of 54.4 trillion won ($48.86 billion) this year, up from last year’s 51 trillion won. Operating profit is forecast to generate 1.3 trillion won compared to the 1.1 trillion won it reported last year.

LG is becoming aggressive in initiatives to bolster user-experience (UX) after it merged its UX lab with Lift Soft Research (LSR) in an attempt to release stellar products based on advanced UX.

Chairman Koo Bon-moo is urging executives to follow through with the implementation of plans to achieve these goals. According to internal sources, the chairman was behind the decision to merge its UX laboratory with the LSR center.

``Our chairman ordered greater attention to the looks and feel of LG products,’’ said an LG Electronics spokesman.