Seoul, South Korea — LG Electronics reported a net loss due to a European Commission fine and slightly lower sales, but it recorded higher operating profits during the fourth quarter.
Unaudited consolidated financial results for the fourth quarter ending Dec. 31, showed a net loss of 468 billion Korean won ($428.96 million), which reflects a fine related to alleged CRT pricing issues imposed by the European Commission in December. The net loss for the prior year’s fourth quarter was 112 billion won.
Fourth-quarter consolidated revenues were 13.5 trillion won ($12.37 billion) compared with the prior year’s revenues of 13.8 trillion won.
Operating profit was 107 billion won ($98.08 million), higher than the prior year’s 86 billion won.
The LG Home Entertainment Company reported record sales of flat-panel TVs, with 9.3 million units in the fourth quarter.
However, sales in the quarter were 6.44 trillion won ($5.91 billion), compared with the prior year’s fourth quarter sales of 6.625 trillion won. Operating profit for the fourth quarter was 19 billion won, down from the prior year’s 168 billion won.
Full-year operating profit of 542 billion won ($480.92 million) was higher than the prior year’s 475 billion won. Revenues from 3D and smart TVs increased, with higher unit sales in the U.S.
Although the Home Entertainment Company had the strongest quarter of the year in terms of revenue, profitability declined somewhat due to lower average selling prices and increased competition, LG said.
The LG Mobile Communications Company reported a 7 percent unit increase quarter on quarter in mobile handset shipments, to 15.4 million, with more than half of the units coming from smartphones. Smartphone shipments grew 23 percent compared with the previous quarter, increasing to 8.6 million devices from the 7 million in the third quarter. Fourth-quarter revenues were the highest of the year, growing 15 percent to 2.81 trillion won ($2.58 billion) quarter on quarter.
Sales of premium LTE smartphones, such as the Optimus G and Vu:2, increased in the fourth quarter, as did the L series and Google Nexus 4. With more European and emerging markets introducing LTE services this year, LG plans to increase smartphone revenues and market share by launching follow-up devices to Optimus G and the L-series as well as the new F-series, the company said.
The LG Home Appliance Company posted almost flat revenues year on year, with sales of 2.94 trillion won ($2.7 billion) in the fourth quarter and strong sales reported for the U.S.
Profitability was affected by unfavorable foreign exchange rates and increased marketing investments, even though average selling prices for home appliance products rose in the fourth quarter.
For the year, consolidated revenues were 50.96 trillion won ($45.22 billion), lower than the prior year’s 54.25 trillion won, but a net profit of 91 billion won ($80.75 million) reversed a prior-year loss of 433 billion won loss.
Despite a 6 percent revenue decrease from 2011, operating profits increased significantly in 2012 to 1.14 trillion ($1.01 billion), from 379 billion won ($342.06 million) in full-year 2011.