[THE INVESTOR] LG Electronics is expected to post more than 10 percent operating profit ratio in its appliance business in the second quarter on upbeat sales of more lucrative high-end products, analyst estimates found on July 1.

The home appliance and air solutions division enjoyed record sales and operating profit to sales ratio in the first quarter.

Especially the operating profit ratio soared to 8 percent in the April-June period and the figure is expected to exceed 10 percent in the second quarter. 

In the first quarter, LG’s operating profit ratio already outpaced those of its global rivals such as 6.1 percent of Whirlpool, 4.5 percent of Electrolux and 4.8 percent of Samsung Electronics’ appliance division.

Hana Investment and Securities has forecast LG’s operating profits in the appliance division to stand about 465.9 billion won (US$406 million) in the second quarter, up 60 percent from a year ago.

“The appliance division is experiencing a structural shift in profit,” said Kim Ki-rok, a Hana analyst, in his recent report. “Its premium products are selling well, raising the average sales prices and profits overall.”

Analysts attribute the division’s robust sales to its upscale push that has been led by president and CEO Cho Seong-jin in recent years.

The company has launched several hit models such as a washer with an extra drawer for smaller laundry and a water-purifying refrigerator. Early this year, the company also launched an ultra-luxury brand called “LG Signature.”

By Lee Ji-yoon (jylee@heraldcorp.com)