LG Electronics reports Third Quarter 2008 Earnings Results
Digital leader registers impressive sales in
mobile handset and digital appliance sales
LG Electronics, a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended September 30, 2008.
Company posted higher-than-expected increase in sales and operating profit in the third quarter both on global and parent basis. Sales and operating profit on a global basis jumped 21.2% to USD 11.30 billion and 58% to USD 537 million, which makes the profit margin at 4.8%, 1.2% higher than a year earlier.
On a parent basis, the increase is even higher; sales is grown 21% to USD 6.479 billion and operating profit booked USD 318 million, 265% of year-on-year. Profit margin was 4.9%, which is 3.3% higher than the previous year.
Business performances on a global basis by division are as follows;
Mobile Communications Company posted sales of USD 3.589 billion, 29.9% up from the second quarter 2008. From handset business, the sales reached USD 3.306 billion, 40.8% up from a year earlier. Shipment of handsets recorded 23 million, 5% growth YoY but declined 17% from the second-quarter, due to slow sales in India and emerging markets.
However, operating profit margin in handset division remained at double digit at 11.5% due to growth in high-end models such as “Secret”, “Viewty” and variety of QWERTY messaging phones in the US.
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Shipment in the fourth-quarter expected to grow and achieve 100 million units annual goal, and double digit profitability is expected to be sustained. “Renoir”, 8-mega pixel camera phone, and the second version of the “PRADA phone by LG” and “Cookie”, a mid-tier full-touch phone will be unveiled in the coming quarter.
Digital Appliance Company sales increased 15.4% to USD 3.024 billion on year thanks to steady demands in air conditioners and washing machines in emerging markets despite slowness from economic recession. Operating margin resulted in 4.2%, declined from 5.4% on year due to rise in price of raw materials.
Digital Display Company sales jumped 21.5% to USD 3.624 billion powered by rise in sales of flat TVs; LCD TVs 55% and Plasma TVs 10% from a year earlier (revenue base). PDP module sales decreased 7%. Following profitability turnaround in the first quarter, operating profit in the third quarter successfully remained profitable at USD 15 million.
Sales from Digital Media Company increased 6.6% on year to USD 1.039 billion due to steady increase in all products; mainly from set-top-box and security in the US market, and BD players and built-in car business. Operating profit and margin increased to USD 35 million and 3.3% by strong effort for cost innovation, especially turnaround of car-business.
