LG Electronics Inc. (LG) has recently announced its fourth quarter and full-year 2016 financial results. And according to the released details, LG has made a profit of KRW 1.34 trillion (USD 1.16 billion). Significantly the company has seen a 12.2 percent increase from 2015.
LG has attributed the increment in operating profit to a strong performance by home appliances, air solutions, and home entertainment. LG has reported revenues of KRW 55.37 trillion (USD 47.92 billion) and net income of KRW 126.3 billion (USD 109.31 million) for the full year(2016).
On the other hand, Fourth-quarter 2016 sales of LG saw a profit of KRW 14.78 trillion (USD 12.79 billion), an 11.7 percent higher than the previous quarter and 1.5 percent higher than the fourth quarter the previous year.
Both LG Home Appliance & Air Solutions Company and LG Home Entertainment Company witnessed their strongest operating profit ever in 2016. LG Home Appliance & Air Solutions Company reported revenues of KRW 17.23 trillion (USD 14.92 billion) for full-year 2016 and KRW 4.04 trillion (USD 3.50 billion) in the fourth quarter. There was an increase of 5.6 percent year-over-year. Operating income of KRW 1.33 trillion (USD 1.15 billion) in 2016 increased 36 percent over 2015 and was the highest among all LG companies.
LG Home Entertainment Company posted fourth-quarter revenues of KRW 4.79 trillion (USD 4.15 billion), an increase of 15.7 percent quarter-over-quarter as a result of strong sales of premium LG OLED and 4K Ultra HD TVs in North America, Europe and Asia. Full-year operating profit of KRW 1.24 trillion (USD 1.07 billion) was the highest in the history of the Home Entertainment Company and 2016 revenues of KRW 17.43 trillion (USD 15.08 billion) were the highest among all LG business units.
However, LG reported a fourth-quarter net loss of KRW 258.80 billion (USD 223.98 million) due to losses from mobile communications and vehicle components. LG Mobile Communications Company reported revenues KRW 2.90 trillion (USD 2.51 billion) in the fourth quarter of 2016, an increase of 15.4 percent quarter-over-quarter due in large part to strong sales of the new V20 flagship smartphone. Profitability was hampered by weak sales of the G5 smartphone and higher marketing investments. Introductions of the next G Series phone and mass-tier devices in the second quarter following Mobile World Congress are expected to help greatly improve the LG Mobile Communications Company's market position in 2017.
Similarly, while LG Vehicle Components Company ended the year with a solid KRW 2.77 trillion (USD 2.40 billion) in sales, an increase of 51 percent from the previous year but R&D investments negatively affected profitability. Nonetheless, fourth-quarter revenue of KRW 865.7 billion (USD 749.2 million) was 66.4 percent higher year-over-year, mostly due to strong growth in electric vehicle components and infotainment systems.