What They Say
LG Electronics reported record sales of $17.53 billion in Q1, with profits positive at $1.56 billion. Sales were up by 18.5% from last year, but profits were only up by 6.4% partly because of a one-time workforce restructuring cost.
Home Entertainment saw sales growth of just 1.4% to $3.38 billion with operating profits of $156.4 million. The firm remains optimistic about the sales of premium TVs in North America and Europe.
The Business Solutions group had sales of $1.67 billion, up 23.7% although profits were not stated.
Home Appliances were up 18.8% on last year.
What We Think
It must have been a really hard decision for LGE to abandon its smartphone business. It looks as though the impact has not been very negative in any way. One of the lessons I learned in business is that what you choose not to do is often as important or more important than what you do do. Saying “We don’t do that” helps to focus energy and management time on what is important.
I was leading a company selling premium displays. We often got enquiries promising big numbers if we gave a good price, but our products were never sold on price alone, so we simply said “Unless the end user has had a demonstration of our displays, we will not give a special quote (we had a price list for regular quantities)”. We saved a lot of time and hassle and it didn’t impact our business at all, apart from occasionally getting a big corporate to see our products. (BR)
