LG Innotek posted a 136 percent jump in first-quarter operating profit, beating expectations as steady demand for smartphone camera modules and high-end semiconductor substrates offset seasonal weakness.
The company reported Monday that its operating profit rose to 295.3 billion won ($201 million) in the January-March period, while revenue increased 11.1 percent to a record 5.53 trillion won for a first quarter.
Operating profit topped the one-month consensus of 236.9 billion won, according to FnGuide, while revenue of 5.53 trillion won fell short of the 5.57 trillion won estimates.
The better-than-expected results were driven by resilient orders for mobile camera modules and strong shipments of high-value substrates such as RF-SiP and FC-CSP, used in communications and high performance memory, the company said.
Revenue at its core optical solutions division rose 11.4 percent to 4.61 trillion won, marking a quarterly record, helped by both smartphone and automotive camera demand. The package solutions unit climbed 16 percent to 437.1 billion won, supported by expanding supply of substrates for artificial intelligence and server applications.
Its mobility solutions business grew 4.2 percent to 487.1 billion won, with automotive lighting modules leading gains. The unit held an order backlog of 19.2 trillion won at end-2025.
LG Innotek CEO Moon Hyuk-soo said in March that revenue from automotive application processor modules began ramping up in the fourth quarter of last year, supporting sustained growth in the mobility solutions business.
The company said it is accelerating a shift toward higher-margin businesses, focusing on semiconductor substrates as demand rises in the current chip upcycle.
“We are expanding production capacity and aim to raise the profit contribution of its package solutions business to match that of its optical segment within five years,” LG Innotek Chief Financial Officer Kyung Eun-kuk said.
LG Innotek is also stepping up investment in physical AI while developing integrated sensing modules combining cameras, lidar and radar for autonomous driving and robotics, the company added.
Supported by growth in its key businesses, shares of LG Innotek have surged to record highs in recent months. The stock, which traded in the mid- to high-200,000 won range through March, climbed past the 400,000 won mark in April, and was trading around 530,000 won as of Monday afternoon.
Brokerages have also raised their price targets on LG Innotek. According to FnGuide, 12 securities firms lifted their targets as of Friday, with Samsung Securities and Shinhan Securities both setting a target of 650,000 won.
"The year 2026 marks a turning point for growth and margin improvement in the company's substrate business," Oh Kang-ho, an analyst at Shinhan Securities said. "Operating margins in the segment are projected to rise to 11.2 percent this year, from 7.5 percent in 2025 and 4.8 percent in 2024."
By Jo He-rim (herim@heraldcorp.com)
