SAMSUNG-LG RECORD UNEXPECTED HIGH EARNINGS

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Samsung Electronics and LG Electronics Wednesday announced estimated business results for the first quarter of this year. Both of the nation's electronics giants surprised the market by estimating higher-than-expected earnings. In particular, LG achieved a record-setting quarterly business performance thanks to pandemic-related shopping behaviors.

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Sales of 18.8 trillion won and operating profit of 1.5 trillion won. This is what LG Electronics achieved in the first quarter of this year. The company saw its sales and operating profit jump 27 percent and 39 percent on-year, respectively. Both are highly impressive quarterly numbers. LG earned the highest operating profit in 12 years, dating back to Q2 of 2009 when it thrived on a boom of LCD TVs and premium mobile phones. The surprising performance was likely bolstered by strong demand for refrigerators and TV sets, since consumers are showing pandemic-related shopping behaviors, like compensatory or retaliatory consumption, with the global economy gradually picking up steam.

[Soundbite] Lee Jang-kyun(Hyundai Research Institute) : "Sales of premium home appliances and TVs were very good last year. It seems the boom continued to affect the business performance in the first quarter. Plus, advanced economies are now picking up."

Samsung Electronics' business performance is usually driven by its semiconductor business. But in the first quarter, smartphones and home appliances contributed greatly to the earnings growth. The tech giant recorded 65 trillion won in sales and 9.3 trillion won in operating profit on the back of bullish sales of smartphones and TVs. But its earnings from semiconductors were lower than expected, because its chip plant in Austin suspended operations for more than a month after severe winter storms caused a massive power crisis in Texas in February.

[Soundbite] Kim Young-woo(SK Securities Company) : "In the case of large-scale integration systems and foundries, reductions in sales and operating profit, and consequential business losses were reflected as the result of the prolonged power outage at the Austin fab."

It seems the company will likely make up for the production losses starting in Q2, as memory chip prices are predicted to climb. As the nation's two leading firms achieved surprising business results, there's growing expectations of the economy bouncing back this year.