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LG Reports Net Loss In Q1

Seoul, Korea – LG Electronics posted a net loss in the first quarter as its home entertainment and mobile electronics sectors reported lower sales.

LG reported a corporate net loss of 16 billion Korean won compared with a 675 billion won profit in the year-ago quarter. Net sales for the quarter were 13.16 trillion won, almost flat with the prior year’s 13.22 trillion won.

Operating income was 131 billion won, down 73 percent from the prior year’s 481 billion won.

Home entertainment segment sales were 5.28 trillion won, down 4.8 percent year on year and operating profit was 82 billion won, down from 150 billion won year on year.

In home entertainment, LG reported unit sales of flat panel TVs up 13 percent during the quarter but revenue declined year on year due to a slower season and decreased prices. Plasma TVs showed growth in the U.S. and LG expects the marketing of Cinema 3D and Smart TV products, expanding market share of “customer friendly products” will help sales and “continuing cost cutting efforts” will help profitability.

Mobile communications sales were 2.91 trillion won, down 8.3 percent year on year and the segment had an operating loss of 101 billion won compared to a year-on-year operating profit of 28 billion won.

Unit shipments of handsets declined 10 percent year on year, but North America showed strong sales of its Optimus One/2X phones. LG hopes to return to profitability in the second half with new smartphone introductions and cost cutting.

Home appliance sales were 2.69 trillion won, up 13.4 percent year on year, but operating profits were down by about half to 103 million won. Rising sales in North America was one factor in higher overall sales for the segment.