LG Electronics cheers soccer boost


LG credits aggressive marketing of its screens during the World Cup, with many restaurants and bars showing the games

staff and wire reports

SEOUL, South Korea -- LG Electronics is a stock-exchange loser on Thursday, in line with the regional selloff.

But the consumer-electronics company has plenty to cheer over its sales during the World Cup.

LG Electronics on Wednesday posted record revenues for the second-quarter, thanks to strong sales of its flat-screen televisions and digital TVs.

Profits fell, mainly due to a special gain it booked last year.

LG makes a wide range of electronics and recently signed a deal to sell its flat-screen televisions in Japan (full story).

Sales jump 15 percent

It is also the world's air-conditioner manufacturer. It said sales for the quarter through June 30 rose 15 percent over last year, to 4.9 trillion won ($4.1 billion).


LG is the biggest maker of air conditioners in the world, and also promoted its video cell phones during the World Cup

The World Cup ended on June 30. South Korea's national team generated a fervor for soccer in Korea.

The Red Devils went further than any Asian team to date, playing in the consolation game on June 29. Restaurants and outdoor venues through Asia broadcast the games on specially purchased big-screen TVs.

Goldman Sachs has identified LG and its consumer-electronics rival Samsung Electronics as the two main corporate winners out of the event (full story).

There are losers, too. Tickets to Japan's All-Star baseball game on Friday are not selling as well as last year, partly due to the World Cup (full story).

LG's second-quarter figures were better than analysts had expected.

Company credits aggressive marketing

"Aggressive marketing to make the most of the World Cup soccer games boosted domestic sales while handset exports increased 53 percent year on year," LG said in a statement.

Warmer weather as summer sets in also helped increase sales of air conditioners.

Its net profit fell 67 percent to 340.5 billion won ($288 million). But that was explained mainly by a one-off gain of 1.36 trillion won the same time last year.

LG is the eight-biggest stock traded in Seoul. But it was down 4.9 percent to 48,700 won in Thursday afternoon trade.

The Kospi index is off 2.31 percent at the same time, with almost all Asian markets lower (Asian afternoon roundup).

Stronger won a threat

Analysts warned that LG Electronics may struggle in the coming quarter if the won continues to gain ground against the U.S. dollar.

"The stronger won will pressure third quarter revenues and the recovery in the technology sector is likely to be delayed to the fourth quarter from the third quarter," Simon Woo, an analyst at Hyundai Securities, told Reuters news agency.

The won is trading at 1,181 to the U.S. dollar on Thursday afternoon. That prompted Korea's Finance Ministry to say it would take action on the currency as necessary.

"The government is worried about widespread sentiment that sees the won gaining further," said Choi Jong-koo, director of foreign exchange at the ministry.