By Yoo Seungki
SEOUL, Jan. 30 (Xinhua) -- LG Electronics' fourth-quarter operating profit rose from a year earlier as solid sales of smartphones and flat screen TVs bolstered earnings of the South Korean tech behemoth.
Consolidated operating profit was 107.2 billion won (99 million U.S. dollars) in the three months ended Dec. 31, up 25.2 percent from a year before, the company said in a regulatory filing on Wednesday.
Smartphone sales increased 23 percent to 8.6 million units in the quarter from three months earlier, breaching the feature phone sales for the first time. Flat screen TV sales posted the record quarterly high of 9.25 million, up 26 percent from the prior quarter.
The fourth-quarter earnings were boosted "by sales growth of TV and smartphones," Soh Hyun-cheol, an analyst at Shinhan Investment Corp. in Seoul, said in a report before the earnings release. "The first-quarter operating profit is projected to soar 201.1 percent helped by the seasonal demand for air conditioners and home appliances as well as earnings improvement from smartphone and TV businesses."
The operating profit was down 26.6 percent from three months ago due to a rise in marketing costs and stronger won. The company said its TV-making division saw operating profit margin fall amid a rise in marketing costs, saying that profitability of its home appliance business weakened due to a growth in marketing costs and strong won.
The South Korean won rallied 7.6 percent versus the U.S. dollar in 2012, while surging 19.6 percent against the Japanese yen. The stronger won hurt profitability of local exporters, while weakening price competitiveness in the overseas market.
Both revenue and operating profit in the mobile phone division grew on the back of strong sales of smartphones such as Optimus G, Optimus Vu:2 and Optimus L series. The air-conditioning unit posted an operating loss due to weak seasonality.
The South Korean tech firm's revenue increased 9.1 percent in the fourth quarter from three months before, but it recorded a net loss of 467.8 billion won after posting a 157.1 billion won net income in the prior quarter due to a one-off loss. "The CRT fine in Europe was booked as non-operating loss. About 400 billion won was reflected in the quarter, with the remaining 300 billion won offset by the existing provisions," an official at the company said by phone.
In early December, the European Commission (EC) imposed a fine of 491,567,000 euros (around 700 billion won, or 644 million U.S. dollars) on LG Electronics for allegedly colluding to fix price of cathode ray tubes, or CRT, sold in Europe during the period of late 1990s to 2006.
For the whole of 2012, operating profit almost tripled from a year before to 1.14 trillion won as the company's mobile business swung into the black on smartphone sales. Sales declined 6.1 percent, but it logged a net profit of 90.8 billion won, turning around from a net loss of 432.8 billion won in the previous year.
LG Electronics set its 2013 revenue target at 53.5 trillion won, up from 51 trillion won a year before. The company planned to spend 2.5 trillion won this year for facility investment.
|
