twice connect
careers

LG CE Segment Sales Rise 13%

10/18/2005 09:17:00 AM Eastern

Seoul, South Korea — Booming sales flat-panel televisions pushed up third-quarter sales 13 percent in the digital display segment at LG Electronics.

Sales for the period climbed to $1.3 billion, up from $1.1 billion in the same three months last year.

Exports in LG’s digital display segment, mainly consumer electronics, accounted for a 19 percent third-quarter jump, reaching $972.1 million, compared with $919.7 million in the same three months last year.

LCD-TV sales soared 267 percent year-on-year in the third quarter, ended Sept. 30, while PDP-TV sales increased 54 percent. The company reported increased shipments due to strong demand for PDP/LCD televisions and PDP modules.

LG’s digital display segment reported an operating profit of $26.7 million in the third quarter, up 19 percent from a year-ago $21.9 million.

Third-quarter sales in LG’s digital appliance segment, which includes major appliances, declined 6 percent, down to $1.26 billion from a year-earlier $1.3 billion, as won appreciation and transfer of low-end product manufacturing overseas were the prime reasons for the drop.

Majap segment exports also decreased in the third quarter, dipping 15 percent to $714.6 million, from $836.7 million in the prior-year three months. North America accounted for 17 percent of segment sales in the third quarter, up from 14 percent year-over-year.

Operating profit for the majap segment, however, rose to $85.9 million, from $73.5 million in the third quarter in 2004, due, primarily, to strong North American and domestic brand sales.

The mobile communications segment at LG, the company’s largest, enjoyed sales expansion in the North American market, which helped the business post $2.43 billion in third-quarter sales, a slight increase over the year-ago $2.41 billion.

Export sales for mobile communications remained flat at $2.08 billion, while segment operating profit dropped to $122.1 million, from $223.2 million on lower profit margins for handsets. The company reported strong sales in strategic markets that led to a 31 percent shipment increase year-on-year, as well as a profit recovery, compared with the previous quarter.

Mobile handsets, the primary product in the mobile communications segment, reported $2.19 billion in third quarter sales, compared with $2.18 billion in the same three months last year. Handset export sales edged upward to $1.96 billion, from $1.93 billion year-on-year.

Overall LG handset shipments increased 31 percent in the three months, with overseas shipments rising 55 percent. Handset operating profit in the quarter declined to $117.3 million, from $205.1 million in the same three months in 2004, as margin erosion took its course.

Sales in LG’s digital media segment, primarily notebooks and media, declined 18 percent in the third quarter, down to $744.1 million from a year-on-year $909.2 million. Exports were off 28 percent, dropping to $576.2 million in the three months, from $799.5 million the previous year. Optical storage sales declined 32 percent. However, operating profit in the digital media segment increased to $49.6 million from a year-ago $37.2 million.

Consolidated LG sales in the third quarter fell 1.5 percent to $5.74 billion, down from $5.83 billion year-over-year. The decrease was due mainly to won appreciation, said LG.

Operating profit dropped 21.2 percent in the third quarter, to $267.1 million, from $338.7 million in the same three months in 2004. Net profit, hurt by lower profit margins for mobile handsets and weaker flat-panel prices, plunged 48.5 percent, coming in at $148.8 million, compared with last year’s $290 million.