In the smartphone business, Samsung Electronics and LG Electronics are attracting attention with opposite movements. In particular, Samsung Electronics aggressively launched the ‘Galaxy S22’ this year and was at the forefront of performance improvement, and it was effective as a driving force for earnings. the look you are doing.
According to the Electronic Disclosure System of the Financial Supervisory Service on the 8th, while Samsung Electronics and LG Electronics recorded growth in both sales and operating profit in the first quarter of this year, the performance and related data related to the smartphone business of both companies are also being talked about inside and outside the industry.
First, in the case of Samsung Electronics, the smartphone business, which performed well during this period, led the performance along with semiconductors, the company’s main business.
Samsung Electronics recorded 77 trillion won in sales in the first quarter on a consolidated basis, up 17.76 percent from a year ago. Operating profit increased by 50.32% to 14.1 trillion won, taking advantage of the substantial gains.
In particular, sales are the highest since its inception on a quarterly basis, and operating profit is the second highest after the first quarter of 2018 (15.64 trillion won).
In the market, Samsung Electronics’ performance this time was taken as the performance of the MX division, which encompasses the IT business and the smartphone business, but it is estimated that the smartphone (existing IM division) sales are about 33.4 trillion won and operating profit is about 4.2 trillion won. . This represents an increase of about 16% and 57%, respectively, compared to the same period last year.
Considering the negative factors such as the prolonged Corona 19 pandemic, intensified competition for hegemony between the US and China, the Russia-Ukraine war, and supply chain disruption caused by domestic and foreign interest rate hikes, production disruptions and demand contraction are analyzed to have been successful.
This can also be confirmed in the sales indicators. Although the data is limited to Korea, the point is that the ambitious Galaxy S22, which Samsung Electronics launched aggressively in February of this year, is gaining popularity in sales, etc. In fact, the opening performance of Samsung Electronics’ Galaxy S22 exceeded 300,000 units on the first day, breaking the all-time high. The previous record is 270,000 units of the Galaxy Z Fold 3 and Z Flip 3.
Driven by this momentum, the Galaxy S22 is estimated to have surpassed 1 million units on the 8th, 43 days after its official release.
On the other hand, LG Electronics has already withdrawn from the smartphone business. The smartphone business, which produced losses for 23 consecutive quarters from the second quarter of 2015 to the fourth quarter of 2020, was boldly closed last year.
LG Electronics’ Aemul Complex smartphone business lost around 200 billion won in the first quarter of last year, which was the quarter just before the withdrawal, and disappeared into history.
Accordingly, LG Electronics convened its board of directors around this time last year and decided to close the mobile phone business on July 31 of the same year. It has been 26 years since I entered the business with LG Information and Communication in 1995.
As a result, such a choice by LG Electronics is a sign that it will be evaluated as ‘God’s hand’.
LG Electronics’ sales in the first quarter stood at 21.10 trillion won, up 18.5 percent from the same period last year. Operating profit during this period recorded 1.88 trillion won, up 6.4% from a year ago.
The industry’s general analysis suggests that this was supported by the stable performance of home appliances such as TVs, which are the main businesses.
As a side note, some in the industry are saying that LG Electronics has improved its performance even more than before as it closed its smartphone business, which had been full of losses.
LG Electronics’ earnings improvement is largely benefiting from the demand for ‘untact economy (non-face-to-face economy)’ due to the aftermath of the COVID-19 pandemic in 2020. .
In the second quarter of last year, the quarter when LG Electronics ended its smartphone business, it recorded 17.11 trillion won in sales and 1.11 trillion won in operating profit. This was an increase of 48.4% and 65.5%, respectively, compared to the same period last year. Sales were the highest in the second quarter, and operating profit exceeded KRW 1 trillion for the first time in two quarters in a row, signaling a full-fledged performance improvement.
In fact, in the third quarter of the same year, consolidated sales reached 18.78 trillion won, the highest in the history of the quarter. In particular, quarterly sales exceeded 18 trillion won for the first time ever.
This trend continued through the fourth quarter of last year and the first quarter of this year. Although it is a result theory, this transformation of LG Electronics is not easy to calculate if you consider the smartphone business that previously only gnawed at its earnings.