LG and Samsung post increased revenue year-on-year

We’re at the time of the month when companies announce their earnings results for the first quarter of the year, and LG and Samsung are no different. After providing their earnings forecasts earlier this month, both companies have now shared a full report for the first three months of 2020.

Samsung saw total revenue of 55.33 trillion won ($45.41 billion), which is 5.6% higher than last year thanks to increased demand for server and mobile components. As you’d expect, this is down 7.6% from the previous quarter, which covers the holiday season. Operating profit for this period was 6.43 trillion won ($5.29 billion), a modest increase of 0.2 trillion won ($164 million) year-on-year. This was also down 0.7 trillion won ($575 million) from the previous quarter.

Samsung’s smartphone division, formally the IT and Mobile Communications Division, is its largest business, with 26 trillion won ($21.34 billion) in revenue and 2.65 trillion won ($2.17 billion) in operating profit. However, Samsung expects a sharp decline in the second quarter due to the effects of COVID-19. The semiconductor business had 17.64 trillion won ($14.48 billion) in revenue and 3.99 trillion won ($3.27 billion) in operating profit, maintaining “solid” demand despite global conditions.

The Consumer Electronics Division, which includes TVs and other appliances, saw 10.3 trillion won ($8.45 billion) in revenue and just 0.45 trillion ($369 million) in operating profit, with weaker demand due to COVID-19. Finally, Samsung’s display business saw 6.59 trillion won ($5.41 billion) in revenue and a 0.29 trillion won ($238 million) operating loss, which is owed to lower shipments during the period. Samsung expects COVID-19 to negatively impact all of its divisions during the second quarter due to weaker demand.

As for LG, total revenue was 14.73 trillion won ($12.45 billion), a 0.19 trillion won ($207 million) decline from the same period last year. However, operating profit was 1.09 trillion won ($921.47 million), a 21.1% increase year-on-year, and the second time in LG’s history when quarterly operating profit breaks one trillion won. It’s also the highest profit margin LG has ever had in a first quarter.

Revenue-wise, the LG Home Appliance & Air Solution Company was its strongest, with 5.42 trillion won ($2.51 billion) in revenue, and operating profit of 753.5 billion won ($636.8 million), the highest in the company’s history thanks to cost reduction measures. The LG Home Entertainment Company saw 2.97 trillion won ($2.51 billion) in revenue, and an operating profit of 325.8 billion won ($275.32 million). While revenue was down year-on-year, operating income was higher considering parts of this division have been reclassified to the LG Business Solutions Company. LG’s smartphone business continues to be its weakest, with 998.6 billion won ($843.9 million) in revenue and an operating loss of 237.8 billion won ($200.96 million). However, this is actually a smaller loss than during the last quarter.

The LG Vehicle Component Solutions Company saw first-quarter revenue of 1.32 trillion won ($1.11 billion), and an operating loss of 96.8 billion won ($81.8 million), owing to a disruption in automobile production in Europe and North America. Finally, the LG Business Solutions Company, which now includes laptops such as LG’s laptops, saw 1.71 trillion won ($1.44 billion) in sales, and an operating profit of 212.2 billion won ($179.3 million). Sales were up 3.5%, and profit was up 26.3% from last year mostly thanks to higher demand for solar modules.