Samsung Electronics and LG Electronics surpassed the market forecast in the first quarter and achieved surprising results. For Samsung Electronics, smartphones and home appliances led the performance, and for LG Electronics, strong sales of new home appliances contributed to the growth.
According to the disclosures of both companies on the 7th, Samsung Electronics recorded operating profits exceeding 9 trillion won, slightly exceeding the market estimate in the first quarter of this year. LG Electronics achieved a record-high quarterly performance since its inception with an operating profit of 1.5178 billion won.
■ Samsung and LG both had’good business’ in the first quarter
Samsung Electronics’ operating profit for the first quarter on a consolidated basis was tentatively aggregated to 9,3 trillion won, a 44.19% increase from the same period last year. Sales reached 65 trillion won, an increase of 17.48% compared to the same period last year. Compared to the previous quarter, operating profit increased 2.76% and sales increased 5.61%.
LG Electronics achieved sales of 18.85 trillion won and operating profit of 1.57 trillion won. This is a record-high quarterly record, up 27.7% and 39.2% respectively compared to the same period last year. Excluding the MC division, which decided to withdraw from the smartphone business, the performance of all business divisions increased significantly compared to the first quarter of last year.
■ Samsung Electronics leads smartphones and home appliances, LG Electronics drives new home appliances performance
At Samsung Electronics, the set division made up for the sluggishness of semiconductors, driving performance. In addition to the increase in smartphone shipments, sales of high-margin wearable products such as the Galaxy Buzz are expected to increase, resulting in an operating profit of 4 trillion won in the IM division.
Samsung’s CE division also appears to have recorded an operating profit of KRW 1 trillion thanks to the strong growth of TVs and home appliances. Strengthening promotions of premium QLED TVs and LCD TVs led to increased sales, and it is believed that the customized home appliance’Bespoke’ led the performance.
LG Electronics’ home appliance led the growth. The stock market predicts that the H&A division, which is in charge of household appliances, has surpassed KRW 6 trillion in sales and KRW 800 billion in operating profit. This is thanks to the continued popularity of new home appliances and the success of the space interior home appliance’LG Object Collection’.
The sales of the HE business division, which is in charge of TV at LG Electronics, increased by about 30% compared to the first quarter of 2020, driving the growth trend. OLED TVs are expected to be around 800,000 units, and LCD TVs are expected to increase significantly from the first quarter of last year to 7.8 million units.
■ Samsung·LG,’clear’ in the second quarter
Samsung Electronics is expected to perform well in 2Q following 1Q. Securities market predicts that Samsung Electronics will generate operating profits exceeding 10 trillion won in the second quarter of this year.
Samsung Electronics’ 2Q earnings improvement is expected to be led by semiconductors. In 2Q, the IM division is expected to deteriorate in profitability due to deteriorating product mix. Home appliances and TVs are also expected to see slower growth. Semiconductors are expected to offset the decline in finished product earnings.
Researcher Song Myung-seop of Hi Investment & Securities said, “Despite a drop in earnings in the IM division due to a decrease in high-end smartphone shipments, the semiconductor division’s profits will increase significantly due to a higher-than-expected ASP.
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LG Electronics is also expected to continue its earnings growth in 2Q following 1Q. Accordingly, it is expected that this year’s performance will be better than last year (sales 63,2638 billion won, operating profit 3,1918 billion won), the record high.
Ji-san Kim, a researcher at Kiwoom Securities, said, “The strong demand for home economy centered on home appliances and TV will continue, and automobile parts will show improvement in constitution, mainly for electric vehicle parts.” It can be overcome through improvement and ASP rise, and this is the fundamental difference between mobile phones and mobile phones.”