LG Electronics net profit down 91 percent

April 24, 2013
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LG Electronics' OLED 55-inch-wide (140-cm) and just 0.16 inches (four mm) thick television/AFP
LG Electronics’ OLED 55-inch-wide (140-cm) and just 0.16 inches (four mm) thick television/AFP

, SEOUL, Apr 24 – South Korea’s LG Electronics Inc. said Wednesday its first-quarter net profit fell 91 percent from a year earlier, due to lacklustre TV sales and losses from investments in affiliates.

The world’s number two TV maker posted a net profit off 22.1 billion won ($20 million) for the first three months of the year, compared to 247.5 billion won in the same 2012 period.

A surge in handset sales was more than offset by price cuts that scythed down the profit margins in its crucial television division.

Like a number of export-focused South Korean manufacturers, the company also suffered from currency rate changes that lent Japanese rivals an important edge.

Operating profit fell 13 percent to 349 billion from 402.7 billion won a year earlier, while revenue was up 6.8 percent at 14.1 trillion won.

The net income figure was below the average 235.8 billion won forecast in a Dow Jones Newswires poll of analysts.

Analysts said in order to drive its future earnings growth, LG needed to deliver a satisfying next-generation smartphone model in the second half of this year.

LG recently released a variation of its flagship Optimus G model, called Optimus G Pro, in South Korea and Japan. The device will be released in the United States in May.

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