Smartphone and TV sales trim losses for LG

The South Korean electronics company sees its revenue drop but its net loss narrows due to higher sales of smartphones and HDTVs.

LG's Optimus LTE
LG's Optimus LTE Josh Miller/CNET

LG Electronics was hit by a drop in revenue and a net loss for its fourth quarter, but that loss was lower than a year ago thanks to strong demand for smartphones and TVs.

For the quarter ended in December, sales dipped 6 percent, while the net loss narrowed to 111.6 billion won ($99 million), compared with a loss of 256.4 billion won in 2010's final quarter. Operating profits hit the black, jumping to 23 billion won ($20.5 million), compared with a loss of 32 billion won in the prior year's quarter.

The quarter was helped by healthy demand for higher-end smartphones and flat-screen TVs.

Though mobile-phone shipments fell to 17.7 million from 21.1 million in the third quarter, revenue rose due to higher smartphone sales. LG saw strong sales from its Optimus LTE handset and good growth from other smartphone models. The Optimus LTE has scooped up more than 1 million in unit sales since its debut in October.

In the home entertainment business, TV shipments hit 8.8 million for the quarter, helped by strong holiday shopping.

Still, the company faces a highly competitive landscape. LG's share of the smartphone market fell to 4 percent during the quarter, compared with overall industry growth of around 8.5 percent, says a report from Oppenheimer & Co. As such, the financial firm is forecasting a difficult 2012.

"Management's focus remains on smartphones (especially 4G LTE/premium) and a move away from feature phones," noted the Oppenheimer report. "This suggests 2012 could be another year of overall market share losses for the company given a still meaningful contribution from feature phones. The improvement in LG's operating results is a positive, but it's still well behind the competition, especially those solely focused on smartphones."

For 2012 overall, LG is aiming for sales of $53 billion with plans to spend $1.5 billion and invest around $2.4 billion in R&D.

About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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