LG profits soar despite decline in revenue

The operating profit increased significantly in 2012 to $1.01 billion, from $342.06 million in 2011, despite a 6-per-cent decline in revenue from 2011.

Smart TVs, 3D TVs, and smart phones are the flagship products of LG. The company plans to continue to aggressively market 3D and Smart TVs and aims to expand its share of the premium TV segment in 2013 with Ultra-HD TVs and OLED TVs. The company expects revenue and profitability to see growth in 2013 with more competitive products, advanced technologies and a stronger focus on profitable regions.

LG Home Entertainment Co reported record sales of 9.3 million units of flat-panel TVs in the fourth quarter, resulting in a 17.4-per-cent increase in revenue quarter on quarter to $5.91 billion and full year operating profit of $480.92 million. 

Revenue from 3D and Smart TVs increased with higher unit sales in the United States, Europe and Commonwealth of Independent States (CIS). Although the company had the strongest quarter of the year in terms of revenue, profitability declined somewhat due to lower average selling prices and increased competition. 

LG Mobile Communications Co reported a 7-per-cent unit increase quarter on quarter in mobile handset shipments to 15.4 million with more than half of the units coming from smart phones. 

Smart-phone shipments grew 23 per cent compared to the previous quarter, increasing to 8.6 million devices from 7 million in the third quarter. 

Fourth-quarter revenue was the highest of the year, growing 15 per cent to $2.58 billion quarter on quarter. Sales of premium LTE smart phones such as Optimus G and Vu: 2 increased in the fourth quarter, as did the L-series and Google Nexus 4. With more European and emerging markets introducing LTE services this year, LG plans to increase smart phone revenue and market share by launching follow-up devices to Optimus G and the L-series as well as the new F-series.

LG Home Appliance Co saw almost flat revenue year on year, with sales of $2.7 billion in the fourth quarter as strong sales in the US and CIS countries were largely offset by sluggish demand in Europe, the Middle East and Latin America. Profitability was affected by unfavourable foreign exchange rates and increased marketing investments, even though average selling prices for home appliance products rose in the fourth quarter. 

LG Air Conditioning & Energy Solutions Co reported sales of $626 million in the fourth quarter, essentially unchanged year on year. An operating loss of $10.08 million in the quarter showed improvement from the same period last year due to operational efficiencies. For full-year 2012, the company recorded  revenue of $3.86 billion and operating profit of $138.42 million. The company’s priority in 2013 is to introduce more energy-efficient and localised products to bolster revenue growth.