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LG Posts Strong Q1 Earnings, Sales

4/16/2008 10:47:00 AM Eastern

Seoul, South Korea — LG Electronics reported strong first-quarter earnings and sales mostly from the performance of its handset and flat-panel TV businesses.

On a global basis, sales rose 16.9 percent to $11.75 billion and an operating profit of $634 million, which makes the profit margin 5.4 percent — 5.1 percent higher than the previous year.

By business unit, LG’s mobile communications company posted the company’s record-high sales of $3.484 billion, up 32.6 percent from the first quarter 2007. From handset business, the sales reached $3.35 billion, a 35.7 percent increase from a year earlier. Shipment of handsets recorded the highest in unit sales as well, a total of 24.4 million, thanks to strong sales of Viewty, Voyager, Venus and other high-tier flagship models, the company said. W-CDMA sales in the United States and Korea increased 18 percent on quarter.

Operating profit margin improved to 13.7 percent, with a 13.9 percent increase for the handset division due to growth in premium models and increased productivity leading to better profitability.

The digital display company sales rose 32.1 percent to $3.8 billion due to an increase in sales of flat TVs and monitors. LCD TVs rose 82 percent, plasma TVs rose 18 percent and monitors rose 33 percent from a year earlier. PDP module sales grew 17 percent year-over-year thanks to the company’s demand in plasma TVs and 32-inch lineups to the company and other vendors. Operating profit moved up to $1 million, the company said.

LG’s digital appliance company sales increased 3.6 percent to $3.19 billion on year and operating margin resulted in 4.7 percent. Decrease in the U.S. market contraction from sub-prime effect, the company’s major appliance sales in other regions including Korea, Asia, Europe and Middle East regions lead overall increase. Slight decline in profitability was due to higher raw material prices, LG noted.

Sales from the digital media company dropped 5.2 percent on year to $1.37 billion, but operating profit and margin increased to $18 million, or 1.3 percent, due to cost innovations in PC business.

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