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LG Electronics' net loss narrows in Q4

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Published : 2014-01-27 15:56
Updated : 2014-01-27 15:56

South Korea's tech giant LG Electronics Inc. said Monday its net loss narrowed in the fourth quarter of 2013 from a year earlier on improved smartphone sales.

Net loss came to 63.4 billion won ($58.76 million) in the October-December period, improving from the net loss of 478.1 billion won posted a year earlier, LG Electronics said in a regulatory filing.

Revenue edged up 0.8 percent on-year to 13.9 trillion won, and operating profit surged 103.8 percent to 238.1 billion won, it said.

For all of 2013, LG Electronics' net income reached 222.7 billion won, up 116.6 percent from the previous year, with its revenue and operating profit also advancing to 58.1 trillion won and 1.2 trillion won, respectively.

LG attributed improved fourth-quarter performances to robust sales of its high-end, long-term evolution (LTE) smartphones, along with increased sales of its TV lineup.

"Better-than-expected TV sales mostly lent support to the improved fourth-quarter revenue," said Soh Hyun-chul, a researcher at Shinhan Investment Corp. "The strong won, however, is expected to have dented its net profit."

A relatively stronger Korean won makes locally produced goods lose price competitiveness in the global market.

"LG's performance is anticipated to maintain its upward trend in the first quarter on the back of its improved seasonal demand of air-conditioners," Soh added.

By sector, LG said its mobile communications division saw its revenue advance 28 percent on-year in the fourth quarter, with its smartphone shipments exceeding the 130-million unit mark for the first time.

LG, a latecomer in the smartphone sector, said the sales of its LTE devices advanced 110 percent over the cited period on strong sales of its flagship G2.

The same division, however, posted an operating loss of 43.4 billion won as marketing costs increased amid intensified rivalry in the industry.

The tech giant said the fourth-quarter revenue of its home entertainment division advanced 18 percent on the back of improved LCD TV sales in advanced markets, buoyed by the end-year seasonal demand.

The company's marketing strategy for its premium display lineup including Ultra HD TV also added to improved sales figures, it added.

LG said its home appliances sector, however, posted a sluggish performance due to intensified competition in emerging markets such as India.

Its air-conditioning and energy solution division posted a revenue of 719.7 billion won, up 8 percent from a year earlier.

For 2014, LG Electronics said it aims to post a revenue of 62.3 trillion won. It also said the company will invest some 3 trillion won in facilities.

LG said Monday it plans to launch the second-generation phablet, the G Pro2, in February, aiming to narrow the gap with industry leader Samsung Electronics Co. and garner a larger slice of the market at home and abroad.

Alphablet refers to smartphones that approach tablet dimensions.

Data compiled by market researcher Strategy Analytics showed LG accounted for 4.4 percent of the world's smartphone market in the fourth quarter, while its bigger South Korean rival took up 31.8 percent.

Market watchers expect strong competition when Samsung rolls out its next flagship lineup, presumably the Galaxy S5, around March and April this year.

LG also has been introducing a handful of TV models to narrow its gap with Samsung, promoting the world's largest 77-inch curved organic light-emitting diode TVs at the U.S. Consumer Electronics Show in January.

Shares of LG Electronics closed at 68,900 won Monday, down 1.29 percent from Friday's close. LG released the earnings result during Monday's trading session. (Yonhap)

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