(MENAFN) LG Electronics reported a decline in operating profits during the first quarter of this year, marking a drop of more than 10 percent compared to the same period in the previous year. The company disclosed in a regulatory filing that its first-quarter operating profit totaled 1.33 trillion won (USD984.9 million), down 11 percent from 1.5 trillion won recorded a year earlier. Despite this decline, LG Electronics' sales saw a modest increase of 3.3 percent year-on-year, reaching 21.09 trillion won, marking the highest level for any first-quarter results.
The reported operating profit figures were in line with average estimates, as indicated by a survey conducted by Yonhap Infomax, the financial data company affiliated with Yonhap News Agency. LG Electronics attributed the decline in operating profits for the first quarter to several factors, including heightened material costs and intensified competition in the market. However, it is noteworthy that the company managed to maintain operating profits above one trillion won for the fifth consecutive year since the first quarter of 2020, underscoring its resilience amidst challenging market conditions.
In response to the evolving market landscape and uncertainties surrounding the recovery of market demand, LG Electronics outlined its strategic initiatives aimed at driving future growth. The South Korean home appliance giant revealed plans to introduce new business methods, such as subscription-based models, and expand its business models to adapt to changing consumer preferences and market dynamics. These measures are positioned as key drivers for future growth, enabling LG Electronics to navigate uncertainties and capitalize on emerging opportunities in the global market.
The first-quarter performance of LG Electronics reflects the broader challenges faced by companies operating in the technology and consumer electronics sectors, characterized by increasing competition and cost pressures. Despite the decline in operating profits, LG Electronics remains committed to innovation and strategic adaptation, leveraging new business models and initiatives to sustain its growth trajectory amidst a dynamic and competitive market landscape.
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