LG logs a loss on EU fine, but sees smartphone strength
The fourth-quarter loss was driven by a big fine over price-fixing charges. On the plus side, LG saw record sales of smartphones and lots of interest in "premium 4G devices."
LG Electronics has posted losses within its fourth-quarter 2012 results due to a heavy fine imposed by the European Union over price-fixing allegations.
The world's second-largest television set maker by revenue posted its Q4 2012 financial report today, detailing its first loss-making quarter in a year. Net losses accounted for 468 billion won ($429 million) in the fourth quarter of 2012, in comparison to a loss of 112 billion won in 2011.
Consolidated revenues currently stand at 13.50 trillion won ($12.4 billion).
LG also posted an operating profit of 107 billion won ($98.84 million) in the quarter, which is up 25 percent year over year, based on record smartphone sales of 8.6 million in comparison to third-quarter sales of 7 million. Overall handset sales -- including both feature phones and smartphones -- rose 7 percent to 15.4 million units.
The electronics firm's mobile business achieved overall revenue of 2.81 trillion won ($2.58 billion), up 15 percent quarter over quarter. LG also says that its customer base for "premium 4G devices" -- such as the Optimus G -- grew in the fourth quarter, and the company intends to capitalize on the expanding 4G market in Europe and in emerging markets this year.
However, profit margins in the television industry continue to slide. LG reported another quarter of losses within its television sector; 5.7 percent in the second quarter, 0.8 percent in the third quarter, and 0.3 percent in the fourth quarter. The firm says that it is not only strong competition from local rivals that has almost flatlined the television sector, but a weak yen has also contributed, despite "aggressive marketing efforts." LG plans to try and reinvigorate its decaying business by tapping into the premium television market and offer OLED and Ultra HD television sets in 2013, along with the sales of 3D and Smart TVs.
In December, LG was fined 492 million euros ($664 million) by the European Commission as part of one of the largest antitrust fines in history. Philips, LG Electronics, Panasonic, Toshiba, Samsung SDI and Technicolor were all fined individually for an overall penalty of over 1 billion euros, after the EU decided that the companies had all been involved in a scheme to rig the prices of cathode ray tubes, used in both computer monitors and television screens. Panasonic plans to appeal the ruling.
This story originally appeared at ZDNet's Between the Lines under the headline "LG Electronics posts loss through EU price fixing fine."