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LGE Q3 CE Segment Sales Rise 2.7%, Profit Slides

10/19/2004 12:21:00 PM Eastern

Seoul, South Korea — Strong export sales of plasma and digital TVs accounted for a 2.7 percent third-quarter sales increase for the display and media segment at LG Electronics.

LGE’soverall segment sales hit $1.93 billion in the three months, up from a year-on-year $1.88 billion. LGE reported a 153 percent year-over-year sales rise in PDP and a 53-percent surge in digital TV.

Export sales in the display and media segment, mainly consumer electronics, climbed 1 percent to $1.64 billion in the third quarter, compared with $1.61 billion in the same three months in 2003.

However, profit in LGE’s display and media segment dropped to $58.4 million in the third quarter, down from $68.1 million in the previous three months, due to falling PDP panel prices and severe competition in the optical storage market. Segment operating profit margin decreased to 3 percent from 3.6 percent year-on-year.

With exports of washing machines, refrigerators and air conditioners rising 18 percent in the third quarter to $775.9 million from $659.1 million in the same quarter a year ago, third-quarter sales in LGE’s appliance segment moved up 17.5 percent to $1.2 billion from $1.1 billion in the same three months a year earlier.

The appliance segment registered a third quarter operating profit, coming in at $68.1 million, compared with $43.4 million year-over-year. Operating profit margin rose to 5.4 percent from 4.1 percent in the three months.

Handset sales in the third quarter soared 64.2 percent to $2 billion from a year-ago $1.2 billion, with unit growth rising 55 percent to 11.8 million units. Strong sales in North America pushed up overseas sales by 12 percent. Operating profit in the handset segment in the third quarter more than doubled, reaching $190.2 million, from a year-ago $71.7 million, while operating profit margin increased to 9.4 percent from 5.8 percent.

In consolidated results, LGE export sales, which rose 27.9 percent in the third quarter to $4.2 billion from $3.2 billion, helped boost consolidated third quarter sales by 24.3 percent to $5.4 billion from $4.3 billion in the same three months in 2003.

Consolidated net income hit $269 million in the third quarter, compared with $198.2 million in the same three months the previous year. Gross profit margin moved up to 25.1 percent in the third quarter from 22.8 percent a year ago.

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