Deliver Your News to the World

Record-high Earnings in Second Quarter for LG Electronics


Seoul, Korea .- LG Electronics (LG) today announced unaudited consolidated earnings results of the three-month period ending June 30, 2009. Amounts in Korean Won (KRW) are translated into US Dollars (USD) at the average rate of the three-month period in each corresponding quarter: KRW 1,291 per USD (2009 Q2), KRW 1,409 per USD (2009 Q1, QoQ) and KRW 1,016 per USD (2008 Q2, YoY).

Sales and Profit
In the second quarter of 2009, LG posted record-high earnings in sales and operating profit on both a parent and a global basis. Sales on a global basis (including LG’s overseas subsidiaries) soared 13.8 percent to KRW 14.497 trillion (USD 11.229 billion) year-on-year. Operating profit jumped to KRW 1.133 trillion (USD 878 million) resulting in a margin of 7.8 percent, 1.1 percent higher than the previous year. On a parent basis the company recorded sales of KRW 8.477 trillion (USD 6.566 billion) and an operating profit of KRW 714 billion (USD 553 million).

The Home Entertainment Company saw sales rising by 19.3 percent to KRW 4.509 trillion (USD billion), returning a profit of KRW 224 billion (USD 174 million) for a margin of 5.0 percent, 4.7 percent higher than the previous year, as a result of robust flat panel TV sales -- especially LCD TVs -- even during the off-season. Shipments rose 45 percent YoY to 4.28 million units. The company expects its flat panel TV shipments in the third quarter to be even higher as demand for premium models.

The Mobile Communications Company reported KRW 5.140 trillion (USD 3.981 billion) in sales, 25.8 percent higher than the previous year, and operating profit of KRW 545 billion (USD 422 million) with a margin of 10.6 percent. Handset sales accounted for KRW 4.877 trillion (USD 3.778 billion), up 29.9 percent YoY, and operating profit reached KRW 538 billion (USD 417 million) for a margin of 11.0 percent. Shipments of handsets recorded an increase of 7.8 percent YoY and 32 percent QoQ to 29.82 million units thanks to strong demand in mid-tier models such as the full touchscreen Cookie phone, QWERTY keypad messaging phone LG-KS360, a multimedia powerhouse feature-rich Arena with new S-Class UI, enV3 with a QWERTY keypad for messaging, and enV Touch with a QWERTY keypad and touchscreen. Profitability improved with a product mix centered on new model launches and solid growth from existing mid- to high-tier handsets. With the global economic downturn expected to continue, LG sees the global market declining over 6 percent YoY to around 280 million units in the third quarter but, as for LG, steady growth is expected with the introduction of high-end devices such as the fourth model in the LG Black Label Series, smartphone GM730, and the one-of-a-kind GD900 Crystal with transparent keypad.

The Home Appliance Company reported an increase of 9.8 percent to KRW 2.339 trillion (USD 1.812 billion) year-on-year. The currency impact resulted in sales declining 14 percent on a USD base but growing 10 percent for Korean won. Continuing problems in the housing market slowed the pace of recovery of the home appliances industry but the company’s product competitiveness resulted in an operating margin of 7.7 percent, 2.9 percent higher from a year earlier, at KRW 181 billion (USD 140 million). Looking at the third quarter, market demand is expected to shrink YoY due to the ongoing recession but the decline in the market is expected to slow down.

The Air Conditioning Company saw sales rise 1.8 percent to KRW 1.720 trillion (USD 1.332 billion) year-on-year with sales falling in US dollar base but increasing in Korean won base. Operating margin resulted in a profit of KRW 175 billion (USD 136 million) due to the growth in demand of premium models. Despite the current recession, the company foresees market share growing in the third quarter in Korea, Europe, Australia and other markets in the southern hemisphere with more energy efficient commercial air conditioners and inverter-embedded residential products.

The Business Solutions Company reported a 8.7 percent decline in sales YoY to KRW 1.016 trillion (USD 787 billion) with an operating profit of KRW 14 billion (USD 11 million). The company felt the greatest impact of the recession which resulted in falling demand for monitors, automotive products and security devices. The company will focus on growing its sales of monitors as it enters the high season for IT products and automotive products are expected to improve as the global auto industry gets back on track.

Financial Statement and Non-operating Items on a Parent Basis
LG recorded a recurring profit of KRW 1.408 billion (USD 1.091 million) and a net profit of 62 percent to KRW 1.146 trillion (USD 888 billion) with a margin of 13.5 percent, 3.7 percent higher than a year earlier. Foreign exchange gain of KRW 286 billion (USD 222 million) and equity method gain of KRW 461 billion (USD 357 million) from overseas subsidiaries and affiliates helped pushing up net profit. LG Display, in which LG Electronics owns a 37.9 percent stake, booked an equity method gain of KRW 112 billion (USD 87 million).

2009 3Q Business Direction and Prospects
LG Electronics expects sales to grow over 10 percent YoY as demand for LCD TVs and mobile phones continues to expand, with profitability comparable to last year’s level.


This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.