jump in notebooks and plasma tv sales boosts lg’s q3 earnings
• Middle East and Asian markets drive digital leader’s strong gains
• LG’s MEA revenue touches US$730 million as company edges closer to its 2007 target
• Lower Gulf performance rides high on successful campaigns
Global digital leader LG Electronics, a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three-month period ended September 30, 2007.
Due to stable operations from all business divisions, LG’s sales and operating profit recorded increase from a year earlier. Based on LGE global results, sales in the third quarter of 2007 jumped 11.8 per cent to US$ 10.680 billion. Operating profit recorded US$390 million, which makes the profit margin at 3.6 per cent, 1.3 per cent point higher than the previous year.
In the Middle East and Africa, LG’s sales from January to September 2007 touched US$2.405 billion, with the third quarter accounting for US$730 million. The company is on course to achieve its ambitious MEA sales target of US$3.3 billion, said Mr. K.W. Kim, President of LG Electronics – Middle East and Africa.
“LG’s Q3 success in the Middle East have been driven by a number of significant factors, chiefly the ‘Life’s Good’ promotion in the Lower Gulf, greater stability in MEA markets and increased spending by consumers in Morocco and Iraq,” Kim explained. “With innovative products such as the 32-inch plasma TV and LG Viewty mobile handset planned for launch in the coming weeks, we are confident of continuing our impressive performance.”
Across the globe, LG’s Mobile Communication Company recorded sales of US$ 2.839 billion, 4 per cent up from 2006. The company’s shipment of handsets recorded the highest in unit sales, a total of 21.9 million, thanks to increase in emerging markets such as Latin America and Asia/Middle East.
Despite increased portion of low end and ASP drop from mainstream models, improvements in cost structure have sustained decent profitability. Operating profit margin reached 8.4 per cent at a stable level over last year. Outlook for a quarter ahead continues bright in mobile handset unit sales and profits, expecting a peak due to seasonality and rise in 3G.
Digital Display Company sales jumped to US$ 3.416 billion, 18.7 per cent YoY and 16.3 per cent QoQ, powered by rise in sales of plasma and LCD digital TV at 17 per cent QoQ and plasma panels at 21 per cent QoQ. Operating loss reduced to US$ 31 million QoQ primarily due to improvement in PDP modules geared by seasonal demand and new 32-inch line-ups and turnaround in flat panel TVs and monitor business division.
Further growth is expected in the fourth quarter in 40-plus inches large flat panel TVs and great demand and popularity of full HD resolution models.
Sales from Digital Media Company increased 9.8 per cent YoY to US$ 1.440 million, geared by rise in desktop PCs in Korea and notebook PCs overseas. Operating profit and margin posted US$ 31 million and 2.2 per cent, turnaround from a year ago. Shipment of IT products is expected to increase further and higher premium product portion to lead to better profitability in upcoming high-demand season.
Digital Appliance Company sales rose 11.4 per cent to US$ 3.001 billion YoY, but declined 22.7 per cent QoQ primarily due to low-demand seasonality. Sales in Korean market increased thanks to performance from premium products such as three-door refrigerators, and commercial air-conditioners. Steady and remarkable sales of steam drum-type washing machines in US helped achieving overall 14 per cent growth (17 per cent in US$ basis) in overseas markets.
Despite won appreciation and rise in material costs, growth came from cost innovation and expansion of premium products centred in developed markets such as US. Slowdown in US may be seen in coming quarter due to economic situation like sub-prime, but in other markets the company expects to maintain its strong market position.
Parent basis sales and operating profit are US$ 6.131 billion and US$ 99 million. Recurring profit and net profit jumped 1169 per cent to US$ 417 million, and 1394 per cent to US$ 365 million, compared to last year, thanks to equity method gain of US$ 430 million from LG.Philips LCD, its 37.9 per cent stake owned subsidiary, and overseas subsidiaries.
