LG Reports Q4 Net Loss

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Seoul, South Korea — LG Electronics reported a net loss for the fourth quarter, ended Dec. 31, due to foreign exchange losses and pricing pressure for flat-panel TVs, among other factors.

On a parent-company basis, LG reported sales of $4.84 billion for the quarter, an operating loss of $228 million and a net loss of $493 million.

In the fourth quarter of 2008, sales on a global basis rose 22.5 percent year on year to $9.82 billion and operating profit was $74.2 million, resulting in a profit margin of 0.8 percent.

For fiscal year 2008, annual sales on a global basis rose 20.8 percent to a record $36.2 billion with operating profit at $1.56 billion.

Consolidated sales including subsidiaries rose 18.4 percent year on year to $46.4 billion. Consolidated operating profit reached $2.97 billion, for a margin of 6.4 percent, 1.1 percent point higher than the previous year.

By operating unit, LG’s digital display company sales rose to $3.39 billion, an increase of 16.4 percent from a year earlier. Sales of flat-panel digital TVs grew 22 percent year on year and 26 percent quarter on quarter, but PDP module sales declined 44 percent year on year and 24 percent quarter on quarter. Globally, operating profit saw a loss of $10 million primarily due to a sharp drop in the prices of TVs and slowdown in external sales of PDP modules. The company said it sees global demand in 2009 to be similar to 2008 as a result of growing low-end/small sized flat-panel TV demand in emerging markets and expects to expand its market share with stronger branding activities and product lineup, LG said.

Sales for its digital media company increased 11 percent year on year and 15 percent quarter on quarter to $930 million, with operating profit and margin recording $3 million and 0.3 percent, respectively.

LG’s mobile communication company reached a company high of $3.3 billion in sales, 34.6 percent higher than a year earlier. Handset sales accounted for $3.0 billion, up 40.3 percent year on year and 16.5 percent quarter on quarter.

Shipments of handsets recorded 8 percent growth year on year to 25.7 million, which resulted in a record 100.7 million units being sold in 2008 vs. 80.5 million units in 2007.

Operating profit margin declined 8.8 percent year on year and 11.5 percent quarter on quarter, to 5.2 percent, in the handset division due to increased marketing to minimize year-end inventory

The digital appliance company sales rose 20.1 percent to $2.18 billion year on year. Operating margin resulted in a loss of $45 million.


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