LG Electronics shows off good performances in home appliances and electric parts to record earnings surprise

[YONHAP PHOTO]

SEOUL -- LG Electronics has recorded an earnings surprise in the first quarter of 2023, thanks to good performances in the home appliances and electric parts sectors, the company said during an earnings call. This is the first time LG Electronics' quarterly operating profit overtook Samsung Electronics' since 2009 when South Korea adopted the International Financial Reporting Standards (IFRS).
 
The South Korean electronics maker, well known for its refrigerators and televisions, recorded sales of 20.41 trillion won (.23 billion) and an operating profit of 1.49 trillion won. The earnings surprise was heralded while other South Korean companies like Samsung Electronics reported poor results. Due to sluggish semiconductor sales, Samsung recorded an operating deficit of 4.58 trillion won in the semiconductor sector and a total operating profit of 640 billion won in 1Q 2023, down 95 percent from the same period a year ago.
 
LG's earnings surprise was backed by strong performance in the home appliances sector where the company recorded sales of 8.21 trillion won and operating profit of 1.18 trillion won. Other businesses such as energy storage systems (ESSs), and heat pumps targeting the European market, where stronger eco-friendly regulations were imposed, also performed well.
 
The electric parts sector was also one of LG's driving engines for 1Q 2023. The company transformed its business model which was more focused on the business-to-customer (B2C) model into a business-to-business (B2B)-focused one which was able to garner orders of about 80 trillion won by the end of 2022. Electric vehicle companies and other high-end electronics makers favor LG's electric parts.
 
LG's business solution sector, which is one of LG's biggest B2B sectors, also turned a profit by leveraging competitive products in 1Q 2023 after the company recorded a deficit of 18 billion won in 4Q 2022. LG's business solution division reported an operating profit of 65.7 billion won in the first quarter of 2023. As LG is planning to set up mass production systems for robots and EV chargers, the company's B2B businesses are predicted to grow by up to 32 percent in 2023.