LG Electronics posts 2nd straight quarterly loss

April 27, 2011
A clerk talks with customer near the LG Electronics logo at an electronic shop in Seoul, South Korea, Wednesday, April 27, 2011. LG Electronics reported its second straight quarterly loss amid falling sales. (AP Photo/Lee Jin-man)

(AP) -- LG Electronics reported its second straight quarterly loss, hit by investments in affiliates and falling sales, though the size of the red ink sharply narrowed amid improvement in its mobile phone and television businesses.

LG Electronics, a major global manufacturer of flat screen televisions and mobile phones, lost 15.8 billion won ($14.6 million) in the three months ended March 31 compared with a of 674.6 billion won a year earlier, the company said in a regulatory filing Wednesday.

The result came on the heels of a much bigger loss of 256.45 billion in the fourth quarter of last year.

Sales in the first quarter, meanwhile, fell 0.4 percent to 13.2 trillion won.

Inc. ranks No. 2 globally in flat screen televisions behind South Korean rival Co. LG trails global leader Nokia Corp. of Finland and Samsung to rank No. 3 in mobile phones.

In a statement and separate materials for investors, the maker of the Optimus brand of smartphones mainly attributed the net loss to a loss of 56 billion won from investments in affiliates including flat panel maker LG Display Co. and LG Innotek, which manufactures electronic components.

LG Electronics' mobile phone fortunes suffered last year amid intense competition in the global smartphone market and contributed to two straight quarters of operating losses.

The company, however, booked an operating profit of 131 billion won in the first quarter, which came amid cost cuts and better results for phones and televisions.

Operating profit is seen as a direct indicator of business performance before taxes, dividends, asset sales and other items that are figured into net profit or loss.

Sales in its mobile communications business, which includes phones, fell 8.3 percent to 2.91 trillion won, the company said, and the business recorded an operating loss of 101 billion won, though that was sharply lower than one of 261 billion won in the previous three months.

LG said the result "showed significant improvement in the first quarter due to an increase in smartphones in the company's portfolio and reduction in overhead costs."

Mobile phone handset sales fell 20 percent to 24.5 million devices in the first quarter from the fourth, LG said, citing weak seasonality, and declined 10 percent from the year before.

Looking ahead, the company said it would launch new smartphones including the LG Optimus Black and LG Optimus 3D in a bid to return to profitability in the business and that it would seek further cost reductions.

In flat screen televisions, the company said that sales rose 13 percent from the same period last year to 6.8 million sets, though revenue fell 4.8 percent to 5.3 trillion won. But in a positive sign, the company recorded an of 82 billion won, compared with a loss of 65 billion won in the fourth quarter.

Shares in LG Electronics rose 0.5 percent Wednesday to close at 105,000 won. The shares have fallen 11 percent so far this year.

Explore further: LG Electronics posts record Q2 earnings


Related Stories

LG Electronics posts record Q2 earnings

July 22, 2009

South Korea's LG Electronics Wednesday reported a record quarterly net profit, boosted by brisk sales of flat panel televisions and mobile phones.

SKorea's Hynix swings to profit as chip industry recovers

January 21, 2010

South Korea's Hynix Semiconductor said Thursday it swung to a net profit in the fourth quarter, following a loss in the period the year earlier, in a further sign that the global chip industry is recovering from a two-year ...

LG Electronics replaces CEO over profit slump

September 17, 2010

(AP) -- South Korea's LG Electronics, the world's third-biggest maker of mobile phones, said its chief executive will be replaced by the brother of the LG Group's chairman after record losses at its handset business.

LG Electronics posts $229 million quarterly loss

January 26, 2011

(AP) -- LG Electronics reported its first quarterly loss in nearly two years as prices for flat screen televisions fell and devices like the iPhone provided stiff competition for its mobile phone business.

LG puts hopes on 'next generation' 3-D TV

February 16, 2011

(AP) -- LG Electronics says competition is heating up in the global battle to woo viewers to 3-D TVs and the South Korean company thinks it has an edge.

Recommended for you

The ethics of robot love

November 25, 2015

There was to have been a conference in Malaysia last week called Love and Sex with Robots but it was cancelled. Malaysian police branded it "illegal" and "ridiculous". "There is nothing scientific about sex with robots," ...

Tandem solar cells are more efficient

November 23, 2015

Stacking two solar cells one over the other has advantages: Because the energy is "harvested" in two stages, and overall the sunlight can be converted to electricity more efficiently. Empa researchers have come up with a ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.