LG Electronics Inc. (LG) announced record full-year revenues of USD 54.4 billion in 2018, exceeding sales of 60 trillion won for the second year in a row. Full-year profit of USD 2.40 billion increased nearly 10 percent from 2017 reflecting record profitability from appliances and home entertainment products.
Fourth-quarter 2018 revenues of USD 13.99 billion were higher than the third quarter but 7 percent lower than the last quarter of 2017 primarily due to lower sales of mobile products. As a result, fourth-quarter operating income declined to USD 67.1 million.
The LG Home Appliance & Air Solution Company reported full-year 2018 revenues of USD 17.17 billion, an increase of nearly 5 percent from the previous year, generating a profit of USD 1.35 billion, the highest in company history. Fourth-quarter revenues of USD 3.84 billion increased more than 3 percent from the same period last year with sales in Asia and Europe holding steady despite exchange rate challenges in Central and South America and political uncertainty in the Middle East. LG’s strongest performing unit in 2018 is expected to again lead the company this year with strong demand for premium products and consistent growth in South Korea while working to mitigate international trade and exchange rate risks overseas.
The LG Home Entertainment Company recorded full-year revenues of USD 14.37 billion with a record-high profit of USD 1.35 billion thanks to the strengths of LG’s premium product lineup. Fourth-quarter 2018 sales of USD 4.04 billion were 6 percent lower from the previous year but 23 percent higher than the previous quarter due in large part to strong seasonal demand. Going forward, LG intends to grow both revenue and operating profit by focusing on increasing sales of premium OLED TVs and large-screen Ultra HD TVs.
The LG Mobile Communications Company reported 2018 revenues of USD 7.08 billion with sales in the fourth quarter totaling USD 1.51 billion, a decrease of 16 percent from the third quarter. Although the full-year operating loss increased to USD 700.65 million, the mobile division’s business structure showed improvement as a result of better material cost controls and overhead efficiencies based on the company’s platform modularization strategy. In 2019, LG’s mobile division will push 5G products and smartphones featuring different form factors while focusing on key markets where the LG brand remains strong.
The LG Vehicle Components Company reported solid full-year 2018 revenues of USD 3.80 billion, a 28 percent increase from 2017. Quarterly revenues of USD 1.24 billion, the highest performing quarter in the division’s history, were 71 percent higher than the same period last year and nearly 20 percent more than the third quarter largely due to new infotainment orders and strong performance from the ZKW business in Europe. Uncertainties in the vehicle component market related primarily to international trade issues are expected to contribute to flatter growth in the industry in the months ahead.
The LG Business-to-Business Company, recorded full-year 2018 revenues of USD 2.13 billion with profit of USD 148.8 million. The business unit recorded revenues of USD 530.1 million in the fourth quarter – down 11 percent from the same period the year before while up 4 percent from the previous quarter. Fourth-quarter operating profit of USD 13.2 million was impacted by increased investments, the effects of import tariffs and the continuing price depreciation of solar panels, which offset cost improvements. Despite this, LG plans to increase profitability in the business unit by diversifying target markets for its solar business, maximizing the operation of its U.S. solar factory and targeting new growth areas for its information display business.