LG Q1 profit triples on LCD sales

SEOUL: LG Electronics Inc., South Korea's top home appliances maker, said its quarterly profit more than tripled on strong demand for flat screens for televisions and computers.

Red-hot demand for large, thin TVs and folding mobile phones should help LG, the world's top maker of air conditioners, post solid growth this year, although there is a risk that flat-screen prices will fall, analysts say.

LG, which competes with local rival Samsung Electronics Co Ltd, earned 584.7 billion won ($506.6 million) in net profit for the first quarter to March 31, topping analysts' forecast of 440 billion won profit. That is up 209.5 percent from 188.9 billion won a year earlier.

Turnover rose to 5.996 trillion won from 5.2 trillion.

One of the biggest contributors to its earnings is LG.Philips LCD, a 50/50 joint venture with Philips NV that is the world's top maker of liquid crystal displays (LCDs) for televisions and computer screens.

Prices of 17-inch LCD panels rose to $288 in the first quarter from $259.20 a year earlier as a severe shortage of key components limited growth in supplies. But analysts warned that the cycle may peak, with prices likely to fall to $233 towards the end of this year.

LG also makes large, flat plasma televisions, which are also seeing fast growing demand.

Shares in LG, the country's eighth-largest stock with a market value of $9.5 billion, were up 0.92 percent at 77,000 won by 0503 GMT after hitting a record high of 77,100 won on hopes for strong quarterly results. The stock has risen 29 percent so far this year, beating a 10 percent rise in the broader market.

LG, the world's fifth largest cell phone maker, sold 8.75 million mobile phones in the first quarter, slightly lower than its own forecast of nine million and the 8.9 million units sold in the fourth quarter as domestic sales sagged on weak consumer spending. But that was sharply up from 5.6 million units sold in the first quarter of last year.

Motorola Inc., the world's second-largest cellphone maker, said that it had sold 25.3 million handsets in the first quarter and improved its market share, particularly in Europe.

© Reuters