LG Electronics Inc. (066570), the world’s
fourth-largest mobile-phone maker, reported profit that missed
analysts’ estimates after sales of its handsets lagged behind
models from Samsung Electronics Co. and Apple (AAPL) Inc.
Net income rose 47 percent to 159 billion won ($138 million) in the quarter ended June 30, Seoul-based LG said in a statement today. The average of 23 analysts’ estimates compiled by Bloomberg was a profit of 278.8 billion won. Second-quarter sales totaled 12.9 trillion won, also trailed estimates.
LG, overtaken by Apple as the world’s third-biggest handset maker last year according to researcher Strategy Analytics, widened its loss from mobile-phone sales during the quarter after giving up market share to Samsung, the world’s largest handset seller, and the iPhone maker. LG is fighting back with new smartphones running Google Inc. (GOOG)’s Android software and with TVs featuring the latest 3-D technology.
“Sales figures for phones aren’t rising quickly enough,” Choi Nam Kon, a Seoul-based analyst at Tongyang Securities Inc. (003470), said by phone before today’s announcement. “That is forcing them to increase spending on marketing and such, so margins keep narrowing. They need to raise sales volume first.”
LG dropped 2.1 percent to 56,100 won at the close of trading in Seoul, the lowest since Aug. 25. The benchmark Kospi index fell 1.4 percent.
Operating profit more than doubled to 349 billion won, still missing the 364.7 billion won estimate. LG booked a 41.7 billion-won loss from its 38 percent stake in LG Display Co. The flat-panel maker will disclose second-quarter earnings tomorrow, with the average of 27 analysts’ estimates projecting a 32 billion-won loss.
LG counts on smartphone models running on faster next- generation networks using the long-term evolution, or LTE, technology to boost sales.
Mobile-phone shipments may improve in the third quarter from the previous three-month period as the company steps up marketing activities to capture rising demand for LTE devices, Chief Financial Officer David Jung said at a briefing in Seoul.
“The second half will be an important turning point for our product competitiveness,” he said.
The company, which aims to be the largest seller of 3-D TVs this year, will tap demand in emerging markets to increase TV sales in the third quarter, Jung said.
Global LCD TV sales will probably grow 5 percent this year. That’s slowing from a 7 percent increase in 2011, according to DisplaySearch, part of NPD Group. Shipments of 3-D TVs will jump 74 percent this year, DisplaySearch said.
LG, which uses a technology that is different from Samsung’s, says its 3-D glasses are lighter and more comfortable to wear, and cause less eye strain.
The company’s home-appliance division had an operating profit of 165.3 billion won, a 2.6 percent increase from a year earlier, on 2.9 trillion won in sales. The air-conditioner business had a profit of 70.1 billion won, compared with a 43.7 billion-won profit a year earlier.
source : http://www.bloomberg.com/news/2012-07-25/lg-electronics-quarterly-profit-misses-estimates-on-phone-loss.html
Net income rose 47 percent to 159 billion won ($138 million) in the quarter ended June 30, Seoul-based LG said in a statement today. The average of 23 analysts’ estimates compiled by Bloomberg was a profit of 278.8 billion won. Second-quarter sales totaled 12.9 trillion won, also trailed estimates.
LG, overtaken by Apple as the world’s third-biggest handset maker last year according to researcher Strategy Analytics, widened its loss from mobile-phone sales during the quarter after giving up market share to Samsung, the world’s largest handset seller, and the iPhone maker. LG is fighting back with new smartphones running Google Inc. (GOOG)’s Android software and with TVs featuring the latest 3-D technology.
“Sales figures for phones aren’t rising quickly enough,” Choi Nam Kon, a Seoul-based analyst at Tongyang Securities Inc. (003470), said by phone before today’s announcement. “That is forcing them to increase spending on marketing and such, so margins keep narrowing. They need to raise sales volume first.”
LG dropped 2.1 percent to 56,100 won at the close of trading in Seoul, the lowest since Aug. 25. The benchmark Kospi index fell 1.4 percent.
Operating profit more than doubled to 349 billion won, still missing the 364.7 billion won estimate. LG booked a 41.7 billion-won loss from its 38 percent stake in LG Display Co. The flat-panel maker will disclose second-quarter earnings tomorrow, with the average of 27 analysts’ estimates projecting a 32 billion-won loss.
Mobile Loss
LG’s mobile division had a second-quarter loss of 56.7 billion won, compared with the 53.9 billion-won loss a year earlier. The analysts surveyed by Bloomberg News forecast a loss of 51.5 billion won. Sales fell 28.5 percent to 2.32 trillion won.LG counts on smartphone models running on faster next- generation networks using the long-term evolution, or LTE, technology to boost sales.
Mobile-phone shipments may improve in the third quarter from the previous three-month period as the company steps up marketing activities to capture rising demand for LTE devices, Chief Financial Officer David Jung said at a briefing in Seoul.
“The second half will be an important turning point for our product competitiveness,” he said.
TV Business
The home-entertainment division, which makes TVs, had an operating profit of 216.3 billion won, rising from 97.8 billion won a year earlier. The median of four analysts’ estimates compiled by Bloomberg News was 196.6 billion won. Sales fell 5.8 percent to 5.5 trillion won.The company, which aims to be the largest seller of 3-D TVs this year, will tap demand in emerging markets to increase TV sales in the third quarter, Jung said.
Global LCD TV sales will probably grow 5 percent this year. That’s slowing from a 7 percent increase in 2011, according to DisplaySearch, part of NPD Group. Shipments of 3-D TVs will jump 74 percent this year, DisplaySearch said.
LG, which uses a technology that is different from Samsung’s, says its 3-D glasses are lighter and more comfortable to wear, and cause less eye strain.
The company’s home-appliance division had an operating profit of 165.3 billion won, a 2.6 percent increase from a year earlier, on 2.9 trillion won in sales. The air-conditioner business had a profit of 70.1 billion won, compared with a 43.7 billion-won profit a year earlier.
source : http://www.bloomberg.com/news/2012-07-25/lg-electronics-quarterly-profit-misses-estimates-on-phone-loss.html
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