LG profits dip 23% in Q1 due to slowing demand

“LG” Electronics said today, Friday, that its operating profit for the January-March period likely decreased by 23% compared to a year earlier, amid ongoing macroeconomic problems that dampened consumer demand.

According to the “Korean Yonhap News Agency,” the company estimated its operating profit for the first quarter at 1.49 trillion won ($ 1.1 billion), down 22.9 percent from a year earlier. Sales fell 2.6 percent to 20.41 trillion won. Net income data was not available

However, operating profit was 20.7% higher than average estimates, according to a survey by Yonhap Infomax, the financial data company affiliated with Yonhap News Agency.

LG’s quarterly profit is already up from last year, considering the one-time gain of 80 billion won that the company earned from patent licensing achieved in the first quarter of last year.

Stable material costs and steady sales of high-end home appliances helped the company achieve fairly strong earnings results.

The company’s TV business is likely to have turned around in the first three months of the year, after posting losses for the past three consecutive quarters, thanks to improved demand for TVs in the European market and lower inventory levels as well as marketing costs.

Some analysts predicted that the television business would post an operating profit of 439 billion won this year, a whopping 81-fold increase from last year.

The company will release its final earnings report later this month.