LG Electronics operating profit jumped 27 % in the fourth quarter due to strong demand for TVs and premium class washing machines.
The reduced demand for electronic consumer goods in the world put pressure on forecasts of technology companies, and particularly LG, which is the second largest producer of television sets in the world after Samsung Electronics. Meanwhile, the continuing fall in display prices is likely to provide growth of profit margins from the sale of television sets, analysts said before the earnings report of LG.
LG Profit for the quarter from October to December amounted to 349 billion won ($ 290 million), higher than the forecast of analysts surveyed by Thomson Reuters StarMine SmartEstimate, which were expecting 340 billion won.
However, the company reported an unexpected net loss of 140 billion won, which is associated with unfavorable foreign exchange rates, as well as a one-time tax on assets.
Operating profit of LG home appliances rose more than doubled, amounting to 215 billion won. This particular division accounted for most of the company's profits for fifth consecutive quarter thanks to strong sales of luxury washing machines and refrigerators.
Quarterly operating profit of television division of the company has grown to 109 billion won due to good sales of TVs with organic light emitting diode screen (OLED) and ultra-high-definition TV. Profit for the same period last year amounted to 2 billion won and the previous quarter it was 37 billion won.
At the same time, the company recorded an operating loss in the amount of 44 billion won in the segment of mobile phones against a loss of 78 billion won in the third quarter of 2015. The division suffered losses due to slower growth in global demand and strong competition from companies such as Apple (O: AAPL), Samsung, and Huawei Technologies.