Home » Accounting Articles » LG Electronics Reports Third Quarter 2008 Earnings Results
LG Electronics Reports Third Quarter 2008 Earnings Results
LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended September 30, 2008.
AMMAN, JORDAN, October 29, 2008 /Accounting PR News/ -- 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%P higher than a year earlier.
On a parent basis, the increase is even higher; sales is grown 21.0% 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%P higher than the previous year.
However, the company posted net profit of USD 24 million, which is lower than a year earlier, due to translation loss of foreign denominated debt and liabilities and decrease in equity method gain of USD 120 million from earnings of its subsidiaries in overseas and investment in LG Display (NYSE: LPL, KRX: 034220).
The Managing Director of LG Electronics Levant Jordan, Mr. Kevin Cha said, "LGE sales and performance in continuously mounting, due to the new products that we innovate to meet the demands of our customers around the globe. It is our endeavour to constantly fuel the market with elegantly designed and innovative products, and that has enabled us to maintain leading market status in terms of sale".
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 23.0 million, 5% growth year on year 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 U.S.
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 U.S. 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.
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