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LG Reports Higher Q2 Sales, Operating Profit

7/19/2007 11:22:00 AM Eastern

Seoul, South Korea — LG Electronics (LG) reported higher sales and operating profit based mostly on its mobile communications and digital appliance units in the quarter, ended June 30.

LG had sales of $11.2 billion on a global basis, up 12.6 percent from $9.75 billion a year earlier. Operating profit jumped 50.6 percent to $499 million from $324 million year on year on a global basis.

LG.Philips LCD and overseas subsidiaries net profit boosted LG’s recurring and net profit to $496 million and $414 million by equity method gain at $333 million. A year earlier the company recorded net loss of $10.2 million on a parent basis.

By business division, the mobile communication company had a great quarter. Overall sales were $3.1 billion, 24.4 percent higher than a year earlier and operating profit of 11.3 percent, a jump from 0.4 percent year-to-year.

Handset business showed “great progress” LG said both on a year-on-year and quarter-on-quarter basis. Sales improved to $2.92 billion by 26.9 percent in a year on year basis and 15.1 percent in a quarter-on-quarter basis. Profitability of 11.6 percent compares to a loss of 0.7 percent year on year and gain of 4.7 percent quarter on quarter “mainly by premium product mix,” LG said.

Total handset shipments were 19.1 million units, which make accumulating sum of the two quarters to 34.9 million units.

A strong performance in digital appliance business led a jump in sales of 21.4 percent year-on-year and 22.5 percent quarter-on-quarter to $3.88 billion and sustained the operating profit at stable level of 8.1 percent, LG reported.

Digital display company sales came mainly from TVs and monitors were $2.94 billion, a 2.1 percent decrease from the figure from a year earlier, but operating loss of 5.1 percent showed improvement from the previous quarter through fixed cost-reduction efforts and slower flat-panel TV price decline, LG said.

The digital media company’s sales mainly from media and IT products posted $1.34 billion, a 0.3 percent increase from a year earlier. Slow in seasonality plus intensified price erosion led to profit decline, the company said.

LG said for the third quarter it sees continued growth in handset business including WCDMA in emerging and developed market will lead stable shipment. Full-scale global marketing for growing demands in 40 inches and larger flat-panel TVs and value-added IT products will improve profitability.