Roundup: LG Electronics' Q2 profit tumbles 60 pct on weak global demand

South Korea's tech behemoth LG Electronics said Wednesday that its operating profit tumbled 60 percent in the second quarter due to weak global demand for TVs and negative effect from the local currency moves.

Operating profit plunged 60 percent from a year earlier to 244. 1 billion won (211 million U.S. dollars) in the three months to June, the company said in a statement. It missed market expectations of about 300 billion won.

Revenue fell 7.6 percent from a year earlier to 13.93 trillion won in the second quarter, and net income dropped 45 percent to 226.4 billion won.

The revenue was little changed from the prior quarter's 13.99 trillion won, but it declined compared with a year ago due to fiercer competition in the mobile phone market and weak global demand for TVs.

Operating profit tumbled from the prior quarter and a year earlier on the back of weak demand for TVs and the negative effect from the South Korean currency's moves.

The local currency depreciated to the U.S. dollar during the quarter, but the yen and the euro fell at a faster pace than the South Korean currency versus the greenback, weakening the price competitiveness of the tech company.

Home entertainment (HE) business, which manufactures TVs, posted an operating loss of 82.7 billion won in the second quarter on revenue of 3.94 trillion won.

LG said that the HE unit's operating margin slid due to soft global demand for TVs, especially in Latin America and Europe, and negative currency effects, but the company forecast that the global TV market would improve in future quarters due to demand for premium TVs.

Mobile communications (MC) unit, which makes smartphones, recorded an operating profit of a mere 200 million won on revenue of 3.65 trillion won.

Smartphone sales recorded 14.1 million during the quarter. Sales of LTE smartphones, including its flagship model G4, increased to 8.1 million units, the highest since the company launched the smartphone business in 2010.

Despite the robust sales of smartphones, the operating profit reduced amid fiercer competition, which increased marketing costs.

Home appliance & air solution division, which produces consumer electronics and air conditioners, registered an operating profit of 291.8 billion won on revenue of 4.49 trillion won.

The revenue reduced compared with a year earlier, but it rose 10 percent from the prior quarter thanks to strong demand from North America and India. Domestic demand for air conditioners got weak for the delayed advent of hot summer season.

Vehicle components unit, which manufactures auto parts, posted an operating loss of 1.5 billion won on revenue of 450.8 billion won.

The revenue gained 18 percent from the previous quarter due to a growth in car infotainment business, but the operating loss came amid rising costs in research and development as the company has increasingly spent money to foster the business as a new growth engine. Endi