CE Business At LG Flat In Q4

By Jeff Malester On Jan 30 2006 - 8:00am

Strong demand in PDP/LCD panel digital televisions lifted fourth-quarter sales in the digital display business at LG Electronics. However, three-month numbers remained pretty much flat for digital display, coming in at $1.44 billion, up from a year-ago $1.40 billion.

Sales of digital TVs increased quarter-over-quarter by 11 percent, with PDP TVs and LCD TVs up by 10 percent and 14 percent, respectively.

However, due to a sharp decrease in the selling price of LCD TVs and increases in market expenses, LG's digital display business, mainly consumer electronics, recorded a wider operating loss in the fourth quarter, coming in at $83.7 million, compared with a loss of $58.9 million in the same three months in 2004.

Sales in LG's digital appliance segment, which includes major appliances, reached $1.3 billion in the fourth quarter, ended Dec. 31, down from the $1.4 billion posted in the fourth quarter the previous year.

However, digital appliance operating profit moved into the black during the three months, reaching $52.7 million, compared with an operating loss of $10.3 million year-on-year. The company reported strong sales for its DIOS three-door refrigerator in North America.

LG recorded strong fourth quarter operating profit in its handset business, with 2005 earnings coming in at $204.7 million, compared with $147.8 million in the same three months in 2004. Handset sales in the fourth quarter hit $2.5 billion, down from the $2.7 billion posted the prior year.

Sales in the digital media business, primarily notebooks and media, slipped to $847.7 million in the fourth quarter, down from $943.9 million year-over-year. Segment operating profit was recorded at $37.2 million, up from the $31 million reported in the fourth quarter of 2004.

For the 12 months, sales in LG's digital display business increased to $5.3 billion, from $5.2 billion, while the company posted an operating loss of $60 million, compared with an operating profit of $92 million in 2004.

For the 12 months, handset sales reached $8.7 billion, up from a year-earlier $8.6 billion, while operating profit decreased to $397 million, from $547.9 million year-on-year.

Consolidated fourth-quarter sales at LG hit $6.4 billion, down 5.2 percent, compared with $6.7 billion in the same period in 2004. This was due to appreciation of the Korean won and expansion of overseas production.

With sales of handsets and LCD television booming in the fourth quarter, LG operating profit was $218.1 million for the three months, up from $98.2 million a year ago, while net income for the three months rose to $322.5 million, compared with $168.5 million the previous year. Except for digital display, profitability in all divisions increased year-on-year.

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