Samsung and LG post lower revenue in Q2, but Samsung increases profits

Samsung and LG have both posted their earnings results for the second quarter of the year, and both companies saw revenue slip. 2020 has notably been marked by the COVID-19 pandemic, which resulted in lower demand for some products.

Samsung saw revenue drop 4% from the previous quarter to 52.97 trillion won (roughly $44.33 billion), which is also down 6% from the second quarter of 2019. Despite that, operating profit increased 26% from the previous quarter to 8.15 trillion won ($6.82 billion), which is also a 23% increase year-on-year. This is in line with the company's guidance from earlier in the month, and Samsung attributes this growth to increased demand for memory chips and appliances, plus a "one-off gain" in its display panel business.

Samsung's semiconductor business, which includes its memory chips, posted 18.23 trillion won ($15.25 billion) in revenue, up from 16.09 trillion won ($13.46 billion) in the same period of last year. Profits saw an even more dramatic increase to 5.43 trillion won ($4.54 billion) from 3.4 trillion won ($2.84 billion). The display panel business saw a drop in revenue year-on-year from 7.62 trillion won ($6.37 billion) to 6.72 trillion won ($5.62 billion), but this quarter saw slightly better results than the first quarter of 2020, despite waning demand.

Samsung's smartphone division posted 20.75 trillion won ($17.36 billion) in revenue, which is a significant drop year-on-year from 25.86 trillion won ($21.63 billion), but profits actually went up to 1.95 trillion won ($1.63 billion) from 1.56 trillion won ($1.3 billion) thanks to efficient cost management and less marketing spending. Finally, the consumer electronics, which includes TVs and home appliances, division saw revenue of 10.17 trillion won ($8.5 billion) in revenue, down from 11.07 trillion won ($9.26 billion) in the same quarter of 2019, but profits were actually slightly up to 0.73 trillion won ($610.28 million) from 0.71 trillion won ($593.56 million).

As for LG, revenue dropped from 15.63 trillion won ($13.07 billion) in the second quarter of 2019 to 12.83 trillion won ($10.73 billion) in the same period this year. Profits also dropped significantly from 652.3 billion won ($545.32 million) to 495.4 billion won ($414.15 million).

Diving into its divisions, the LG Home Appliance & Air Solution Company saw revenue drop to 5.16 trillion won ($4.31 billion) from 6.1 trillion won ($5.1 billion), and profits dropped from 717.5 billion won ($599.76 million) to 628 billion won ($525.13 million). The LG Home Entertainment Company also saw revenue drop to 2.26 trillion won ($1.89 billion), down from last year's 3.67 trillion won ($3.07 billion). Profits were also down from last year's 205.6 billion won ($171.9 billion) to 112.9 billion won ($94.4 million).

The LG Mobile Communications Company, the smartphone division, saw declining revenue from last year - from 1.61 trillion won ($1.35 billion) to 1.31 trillion won ($1.1 billion) - but it was actually significantly higher than the previous quarter. The company continues to reduce its losses, though, which were 206.5 billion won ($172.65 million), down from 313 billion won ($261.7 million) in the same period of last year.

The LG Vehicle Component Solutions Company saw revenue of 912.2 billion won ($762.69 million), down from 1.42 trillion won ($1.19 billion) in the second quarter of 2019, and operating losses spiked to 202.5 billion won ($169.31 million) - from 55.8 billion won ($46.65 million) - due to many automakers shutting down manufacturing because of the pandemic. Finally, the LG Business Solutions Company posted revenue of 1.31 trillion won ($1.1 billion), after reporting just 675.5 billion won ($564,79 million) in the same period of last year, with operating profits of 98.3 billion won ($82.19 million), compared to last year's 58.1 billion won ($48.57 million).

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