LG Posts Loss, Expects Better Q2
By Steve Smith -- TWICE, 5/4/2009
Seoul, South Korea — LG Electronics reported a net loss of $141 million in its fiscal first quarter, ended March 31, on a parent basis, but reported growth in several categories and sees positive signs for its second quarter.
LG blamed foreign exchange losses and an equity loss of $64 million in LG Display, where the company has a 37.9 percent stake. LG is projecting a 10 percent sales gain, due to the beginning of the air conditioner season “and introduction of new products in major categories.”
On a global basis including LG's overseas subsidiaries, sales grew soared 14.6 percent to $9.12 billion year on year. Operating profit was $324 million, resulting in a margin of 3.5 percent, 2.8 percent higher than the previous quarter.
The Home Entertainment Company sales rose 18.6 percent to $3.05 billion and returned a profit of $10 million due to “robust flat-panel TV sales, especially LCD TVs,” LG said. Shipments rose 40 percent year on year to 3.54 million units. LG expects global demand in Q2 to be higher as demand for small flat-panel TVs grows.
The Mobile Communications Company reported $3.02 billion in sales, 16.8 percent higher than the previous year, and operating profit of $181 million with a margin of 6.0 percent. Handset sales accounted for $2.78 billion, up 22.6 million year over year, and operating profit saw $187 million at a margin of 6.7 percent.
Shipments of handsets recorded a decline of 7 percent year on year and 12 percent quarter on quarter to 22.6 million units due to seasonal effect and the global market contraction. With the global economic downturn expected to continue, LG sees the global market declining more than 10 percent year over year to around 260 million in the second quarter.
The Home Appliance Company reported an increase of 16 percent to $1.57 billion year on year. The currency impact resulted in sales declining on a U.S. dollar base but growing for Korean won. The operating margin successfully recovered from a loss from a year earlier to $72 million.
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