LG says quarterly profit at two year high

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South Korean electronics firm LG said on Friday its Q2 operating profit likely reached a two year high, as analysts pointed to strong contributions from home appliances and its TV set business.

The second-largest TV maker in the world by market share, behind Samsung, LG said in a filing that its April to June profit was likely to be 585 billion Won ($504 million) compared with the 599 billion Won estimates by 23 analysts in a survey by Thomson Reuters.

The would mean the highest quarterly profit since the 610 billion Won in Q2, 2014.

LG has not yet provided any further details ahead of its final results which are due in late July.

Analysts said the results on Friday was likely because the firm saw strong profits from its appliances business due to selling more premium products and unusually warm weather in some markets that boosted demand for air-con units.

They also said its television division probably came into profit as sporting events such as the 2016 Euro football competition boosted demand for big sets. Weak display panel prices also helped boost margins, they said.

However, some remain cautious about LG’s prospects later this year as the appliances business enters its typically weaker season.

Furthermore, sales of its G5 smartphones have been somewhat disappointing and its mobile division likely reported a fifth consecutive loss in April to June.

“Despite the G5’s originality, LG sold only 2.2 million units of the strategic model due to stiff competition”, said HMC Investment analyst Greg Roh said in a report on Thursday, estimating the mobile division booked a loss of 94 billion won.

“We expect the (mobile division) to remain in the red in 3Q16”, said Roh.

LG also on Friday said revenue for the second quarter likely rose 0.5 percent to 14 trillion won, versus 14.4 trillion won predicted by the aforementioned Thomson Reuters poll.

SOURCE: Reuters.

Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.