LG Electronics Expected to Post Strong Results on Record Handset Sales
LG Electronics is expected to continue its strong quarterly results, driven by buoyant handset sales and signs of an upturn in the plasma display panel (PDP) sector, analysts said Wednesday.
Brisk sales of high-end digital home appliances will add additional momentum to the global technology innovator to keep its solid performance, they added.
``Operating profit in the third quarter will exceed 180 billion won, up 25.2 percent from a quarter earlier, thanks to strong handset shipments and expanding production lines for PDPs,’’ Kim Ik-sang from CJ Investment said, adding that the company will post over 6 trillion won in sales in the July-September quarter.
``The company’s quarterly operating profit is expected to reach 128 billion won in sales of 5.9 trillion won, backed by demand for handsets and PDPs,’’ Lee Sung-june of SK Securities said.
Industry watchers said LG is likely to sell a record 20 million mobile phones in the third quarter. Some of them even expect the quarterly sales to reach 22.7 million, an increase of 3.6 million from a quarter earlier.
``Increased sales in its premium Shine, Prada and 3G phones helped LG raise its local market share to around 26 percent,’’ the analyst said, adding that steady sales of low-end phones helped boosted the company’s market share.
``Even in European and North American markets, LG’s premium handsets are selling well on seasonal factors,’’ he added.
Industry observers expect LG to reap some 2.6 trillion won in sales from its handset business and an estimated 200 billion won in operating income in the quarter with profit margins seen around 6 to 8 percent.
``The design-driven strategy has shown good results since last year and the mobile phone business will remain a cash cow for the company,’’ said Cho Sung-eun from Mirae Asset Securities.
Analysts said the turnaround in PDPs is fueling another momentum for maintaining the company’s healthy track record.
Data from DisplaySearch shows that PDP prices have steadily risen since August. ``As the end of the year approaches, LG’s operating deficit from PDPs will see a decline,’’ said Greg Kang from Woori Investment & Securities.
PDP makers are expanding their production lines as prices of flat-screen TVs over 30 inches have risen on seasonal factors and increased profitability. Falling inventory is also pushing up panel prices.
LG plans to strengthen its 50-inch PDP line, raising the production proportion from the current 20 percent to 40 percent in accordance with shifting consumer preferences toward larger TVs.
LG’s color marketing: LG Electronics will introduce a pink-colored ‘Shine’ phone in Europe in October, while the gold-colored phone will debut in Asia in the same month. Based on research of consumer preferences in colors, Europeans prefer a modernized image of pink. In contrast, Asians like the wealth and fame image of gold.
source
Brisk sales of high-end digital home appliances will add additional momentum to the global technology innovator to keep its solid performance, they added.
``Operating profit in the third quarter will exceed 180 billion won, up 25.2 percent from a quarter earlier, thanks to strong handset shipments and expanding production lines for PDPs,’’ Kim Ik-sang from CJ Investment said, adding that the company will post over 6 trillion won in sales in the July-September quarter.
``The company’s quarterly operating profit is expected to reach 128 billion won in sales of 5.9 trillion won, backed by demand for handsets and PDPs,’’ Lee Sung-june of SK Securities said.
Industry watchers said LG is likely to sell a record 20 million mobile phones in the third quarter. Some of them even expect the quarterly sales to reach 22.7 million, an increase of 3.6 million from a quarter earlier.
``Increased sales in its premium Shine, Prada and 3G phones helped LG raise its local market share to around 26 percent,’’ the analyst said, adding that steady sales of low-end phones helped boosted the company’s market share.
``Even in European and North American markets, LG’s premium handsets are selling well on seasonal factors,’’ he added.
Industry observers expect LG to reap some 2.6 trillion won in sales from its handset business and an estimated 200 billion won in operating income in the quarter with profit margins seen around 6 to 8 percent.
``The design-driven strategy has shown good results since last year and the mobile phone business will remain a cash cow for the company,’’ said Cho Sung-eun from Mirae Asset Securities.
Analysts said the turnaround in PDPs is fueling another momentum for maintaining the company’s healthy track record.
Data from DisplaySearch shows that PDP prices have steadily risen since August. ``As the end of the year approaches, LG’s operating deficit from PDPs will see a decline,’’ said Greg Kang from Woori Investment & Securities.
PDP makers are expanding their production lines as prices of flat-screen TVs over 30 inches have risen on seasonal factors and increased profitability. Falling inventory is also pushing up panel prices.
LG plans to strengthen its 50-inch PDP line, raising the production proportion from the current 20 percent to 40 percent in accordance with shifting consumer preferences toward larger TVs.
LG’s color marketing: LG Electronics will introduce a pink-colored ‘Shine’ phone in Europe in October, while the gold-colored phone will debut in Asia in the same month. Based on research of consumer preferences in colors, Europeans prefer a modernized image of pink. In contrast, Asians like the wealth and fame image of gold.
source
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