LG Electronics Inc. said Thursday its first-quarter operating profit moved up 20.2 percent on-year helped by sales of premium home appliances, although its handset sales remained weak.
The company's operating profit reached 1.1 trillion won in the three month period, with sales increasing 3.2 percent to 15.1 trillion won, the regulatory filing showed.
Net profit, however, came to 729.9 billion won (US$674 million), down a sharp 12.7 percent from 835.7 billion won posted a year earlier, the company said.
LG Electronics said the improved operating profit came on solid demand for premium home appliances and TVs. The mobile business, however, continued to post shortfall in the first quarter of 2018.
The company said the home appliances business posted an operating profit of 553.1 billion won, up 8.2 percent from a year earlier.
As for the home entertainment business, its operating profit jumped 76.5 percent to reach 577.3 billion won, helped by strong sales of high-end OLED TVs and Ultra HD TVs.
The mobile communications business, which suffered shortfalls in previous quarters, also remained in losses. The division posted an operating loss of 136.1 billion won.
Accordingly, LG's mobile operations have effectively posted an operating loss for the 12th consecutive quarter as of the January-March period.
LG's vehicle components business that is being built up by the company also posted an operating loss of 17 billion won. The company said the losses came as it continued to make investments for future profits.
The business-to-business segment posted an operating profit of 78.8 billion won on the back of sales of digital signages and solar-light modules.
$1.3 billion acquisition of ZKW
LG has also revealed its biggest acquisition yet. The company is acquiring Austrian company ZKW for $1.3 billion. The company is known for manufacturing lighting and electrical systems used by European automakers like Audi, BMW, Daimler and Porsche. It's one of the first companies to make matrix LED and laser headlights and was almost purchased by Panasonic for $885 million back in 2016.
LG and ZKW will work on developing intelligent lighting solutions. Particularly, lighting technologies that can collect information from autonomous vehicle sensors and cameras and can project high-resolution warnings on roads based on that data.