LG sees profit again on high-value sales

Written by Bloomberg | Updated: Jan 28 2010, 04:20am hrs
LG Electronics Inc, the worlds third-largest mobile-phone maker, posted a profit for a third consecutive quarter as higher sales of more expensive products boosted its annual earnings almost four-fold.

Fourth-quarter net income was 297.2 billion won ($256 million), compared with a record loss of 671.3 billion won a year earlier, according to figures derived from full-year results reported on Tuesday. LG was projected to post net income of 282.9 billion won in the quarter, according to the median analyst estimate in the last 28 days compiled by Bloomberg.

LG, also the worlds second-largest maker of LCD televisions, posted record shipments of handsets and flat-panel

sets in the third quarter and expects to boost sales of both products this year. The company faces the challenge of catching up with smartphone makers such as Apple Inc and Research In Motion Ltd in the industrys fastest-growing segment after falling behind in introducing new models.

The question will be its mobile-phone business, Yoon Hyuk Jin, an analyst at Shinyoung Securities Co, said by telephone. The company seems to have spent a lot on marketing in the fourth quarter, especially for the TV business.

Sales, excluding those of overseas affiliates, rose 8% to 7.1 trillion won in the fourth quarter, while the operating loss narrowed to 139.5 billion won from 309.8 billion won, according to Bloomberg calculations.

LG Electronics, scheduled to report detailed quarterly results on, fell 0.9% to close at 1,08,000 won on the Korea Exchange, before the announcement.

The benchmark Kospi stock index fell 2 %. For 2009, LG said net income quadrupled to 2.05 trillion won, while sales climbed 10% to 30.5 trillion won. The company plans to pay a record 1,750 won per common share in dividends for last year, it said in a separate filing.