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LG Reports Q1 Loss Due To TV Pricing

4/19/2007 03:31:00 PM Eastern

Seoul, South Korea — LG Electronics reported a loss for the first quarter even though its cellphone sales were up, due to falling flat-panel TV prices.

For the quarter, ended March 31, LG posted revenue on a consolidated basis which includes sales of LG’s overseas subsidiaries of $10.22 billion, an increase of 8.3 percent from the previous year.

The net loss for the quarter was $131 million on a parent basis mainly due to loss in equity method $205 million from LG.Philips LCD and overseas subsidiaries. In last year’s first quarter LG posted a $1.5 billion profit.

Digital display sales, including plasma display panels and flat-panel TVs and monitors, rose 1.5 percent to $2.93 billion from the previous year, but posted an operating loss of $2.79 million. Sales from Digital Media Company’s media and IT products were $147 million, 4.7 percent less than a year earlier. LG said problems in its display and media business “stems from seasonality plus intensified price erosion, but mainly due to lower efficiency in capacity of plasma display panels.”

Mobile communication recorded sales of $2.67 billion, 14.7 percent higher than a year earlier. Revenue from the handset business rose 17.8 percent to $2.5 billion, from $2.05 billion a year earlier. Consolidated sales based total shipments were 15.8 million units compared with 14.1 million units for last year’s first quarter. LG’s Chocolate phone was a main ingredient in the division’s success with the phone sold in “GSM open-markets leading a shift of 28 percent gain in sales” versus last year’s first quarter. LG also cited strong growth in WCDMA phones sales in Korea and the United States.

Digital appliance sales rose 15.1 percent to $3.13 billion from a year earlier, thanks to growth in premium product lines. “Improvement of an operating profit was remarkable,” for this business, LG remarked, at $17.9 million, which was 43.6 percent higher than a year earlier and 37.1 percent from the previous quarter.