LG Reports Higher Q2 Sales, Profits

By TWICE Staff -- TWICE, 7/21/2008

Seoul, South Korea — LG Electronics reported higher quarterly sales and operating profit on both a global and parent basis, mainly from strong cellphone and flat-panel TV sales.

On a global basis, sales jumped 22.1 percent to $12.534 billion and operating profit was $843 million, which results in a 6.7 percent profit margin for its fiscal second quarter, ended June 30.

On a parent basis, second-quarter sales rose 22.5 percent to $7.120 billion. The operating profit was $625 million with a profit margin of 8.8 percent.

LG had net profits of $696 million, as equity method gains from earnings of its subsidiaries in overseas and investment in LG Display, the company said.

Business performances on a global basis by division were as follows:

The mobile communications company posted the company’s another record-high sales of $3.788 billion, up 34.3 percent from the second quarter 2007. From handset business, sales reached $3.695 billion, up 38.6 percent from a year earlier. Operating profit margin improved to 13.9 percent, 14.4 percent in handset division due to growth in high-end models and improvements in operational efficiency, the company said.

Shipment of handsets also recorded the highest in unit sales as well, a total of 27.7 million mainly from North America (33 percent) and emerging markets including Middle East Asia, CIS and Central & South America, thanks to strong sales of “Secret,” “Viewty,” “Venus” and other premium phones.

Sales in the digital appliance company increased 4.9 percent to $3.721 billion year-on-year, and operating margin was 7.2 percent despite challenging business environment such as higher raw material prices, economic slowdown and U.S. market contraction from sub-prime effect.

Sales in the digital display company jumped 37.2 percent to $3.683 billion, powered by a rise in sales of flat TVs, with an 86 percent increase in LCD TVs and 31 percent in plasma TVs from a year earlier. The PDP module sales grew 22 percent. Following profitability turnaround in the previous quarter, operating profit in the second quarter successfully remained profitable at $37.4 million, the company said.

Sales from the digital media company was 2.1 percent lower on year, to $1.201 billion, due to low seasonality, but operating profit and margin increased to $12.8 million, or 1 percent, by a strong effort for cost innovation, LG noted.