LG announces overall increase in profit, smartphone division falls further

Many companies are releasing their financial results for the last quarter of 2018 this week, and LG is doing the same. The company has actually posted the results for all of 2018, showing a 10% growth year-over-year in terms of full-year profit, to 2.70 trillion won (roughly $2.40 billion). Its revenue was 61.3 trillion won ($54.4 billion), exceeding the 60 trillion won mark for the second year in a row.

Referring specifically to the fourth quarter, LG says its revenue increased over the previous quarter, but dropped 7% year-on-year, mostly because of the lackluster performance of its mobile division. Indeed, the company's smartphones seem to be its lowest point, with the 7.98 trillion won ($7.08 billion) showing a 16% drop from the previous quarter. In the full year of 2018, the LG Mobile Communications Company increased its operating loss to 790.1 billion won ($700.65 million). For 2019, LG will bet on 5G products and different form factors to try to turn things around.

As for the other divisions of the Korean giant, the LG Home Appliance & Air Solution Company posted the highest operating profit in history at 1.52 trillion won ($1.35 billion). Revenue increased 5% year-on-year to 19.36 trillion won ($17.17 billion) for the full-year, and fourth-quarter revenue was up more than 3% compared to 2017, hitting 4.33 trillion won ($3.84 billion).

The LG Home Entertainment Company also registered record-breaking operating profit of 1.52 trillion won ($1.35 billion), the same as the home appliance division. The company posted 6% lower sales for the fourth quarter compared to 2017, at 4.56 trillion won ($4.04 billion), but the results were 23% higher than the previous quarter due to the holiday season.

The LG Vehicle Components Company recorded a 28% year-on-year growth in revenue for the full year, reaching 4.29 trillion won ($3.8 billion), but the company doesn't mention if it recorded profit or losses in this period. The quarterly results are even more impressive, with a 71% growth over the same quarter last year to 1.4 trillion won ($1.24 billion), which is also a 20% over the previous quarter.

Lastly, the company's business-to-business division posted a profit of 167.8 billion won ($148.8 million), with revenue hitting 2.41 trillion won ($2.13 billion) for the full year. In the fourth quarter, revenue decreased 11 percent year-on-year to 597.8 billion won ($530.1 million). Profits for the same period were 14.9 billion won ($13.2 million).

Going into 2019, LG expects some challenges due to international trade risks and uncertainties in the market. Nonetheless, the company expects to continue growing its businesses.

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