LG Reports Q4 Loss

What a shock!

It probably won’t come as a surprise to hear that LG Electronics is following the trend set by just about every other consumer electronics company and is also posting a loss for the last quarter. Specifically the company recorded a net loss of 671 billion Won (~£353 million) from sales of 6.59 trillion Won (~£3.5 billion).

While not as bad as some companies are predicting, it’s not as good as previous LG financial results, which saw seven consecutively profitable quarters. Contributing to that was a decrease in operating profit from various LG Electronics divisions.

LG’s handset division, for example, while managing to sell a record 100.7 million handsets last quarter (a 40.4 per cent year-on-year increase), saw an 8.8 per cent decrease in operating margin from those sales. Likewise, flat-panel display shipments saw a 16.4 per cent increase year on year, but plasma display sales dropped 44 per cent in the same period, landing LG’s digital display division 14 billion won down overall. Partly due to declining sales, but also as a result of price reductions – obviously of no help to LG’s margins.

LG predicts that “Slow market demand and intensified competition will continue into the new year causing changes in industry dynamics,” which seems a realistic view of the marketplace. Like every other CE company out there it’s strategy now is presumably just battening down the hatches and weathering the storm as best it can.

LG Electronics.

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