LG Electronics Inc swung to a profit in the fourth quarter as its latest smartphone model helped its ailing handset unit post a small profit after six consecutive quarterly losses.
The South Korean company today announced fourth quarter 2011 consolidated revenues of KRW 13.81 trillion (USD 12.05 billion) with an operating profit of KRW 23 billion (USD 20 million). Quarter-on-quarter revenue growth reflected strong performance in home entertainment and home appliances with improved operating profit in the mobile and TV businesses.
The LG Home Entertainment company shipped a record high 8.8 million flat panel TVs from October to December, increasing revenues 17.6 percent from the previous quarter to KRW 6.31 trillion (USD 5.5 billion). While quarterly sales declined modestly from the 2010 period, a strong 2011 holiday season and more premium product mix led by CINEMA 3D TV resulted in an operating profit of KRW 150 billion (USD 130.9 million) in the fourth quarter of 2011. Full-year 2011 home entertainment sales were KRW 22.38 trillion (USD 20.2 billion) with operating profit of KRW 423 billion (USD 382 million). For 2012, LG plans to continue strengthening its position in 3D and Smart TVs with a broadened line of TVs with Cinema Screen design and content.
LG competes with Samsung, Sony and Panasonic in flat-screen TVs.
The LG Mobile Communications Company improved its position in the fourth quarter with operating profits of KRW 12 billion (USD 10 million) and sales of KRW 2.78 trillion (USD 2.42 billion) on the strength of premium smartphones such as Optimus LTE (Long Term Evolution). For full-year 2011, the company posted sales of KRW
11.69 trillion (USD 10.55 billion), a decline of 9.9 percent from 2010.
The turnaround was helped by solid sales of its Optimus LTE model, which runs on Google's Android platform and is LG's most popular smartphone with 1 million sold since its October debut. The firm said handset shipments dropped to 17.7 million in the fourth quarter from 21.1 million in the preceding quarter, as it reduced less profitable feature phones.
For 2012, the company plans to focuse on strategic markets with expanded smartphone line-up led by LTE smartphones.
LG trails Nokia and Samsung in handsets.
The LG Home Appliance Company posted record-high quarterly sales of KRW 2.99 trillion (USD 2.6 billion) in the fourth quarter of 2011 with strong growth in Korea, the U.S. and developing countries with more energy-efficient products. New energy efficient appliances being introduced around the world this year are expected to contribute to 2012 revenue growth.
The LG Air Conditioning & Energy Solutions Company reported sales of KRW 680 billion (USD 593 million) in the fourth quarter, essentially flat with the 2010 fourth quarter. An operating loss of KRW 38 billion (USD 33 million) was attributed to negative macroeconomic issues and product mix weakness in developing markets. The company is increasing its focus on high-efficiency air conditioning systems to help drive sales in 2012.
For 2012, LG Electronics is targeting a revenue goal of KRW 57.6 trillion (USD 53.8 billion) with plans to spend KRW 1.6 trillion (USD 1.5 billion) in capital expenditures and to invest KRW 2.6 trillion (USD 2.4 billion) in research and development.