Seoul, April 16, 2008 – LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended March 31, 2008. Amount in Korean Won (KRW) are translated into US dollars (USD) at the average rate of three month period in each quarter, which was KRW 955 per USD (2008 1Q), KRW 921 per USD (2007 4Q, QoQ), KRW 939 per USD (2007 1Q, YoY).
Sales and Profit
On a global basis, both sales and operating profit soared to the company’s record-high level, thanks to stable operations from all business divisions, mainly from robust sales in handsets and flat panel TVs. Sales jumped 16.9% on year to KRW 11.218 trillion (USD 11.747 billion) and operating profit recorded KRW 605 billion (USD 634 million), which makes the profit margin at 5.4%, 5.1% point higher than the previous year.
On a parent basis, first-quarter sales rose 14.8% to KRW 6.927 trillion (USD 7.253 billion) from KRW 6.034 trillion (USD 6.425 billion) the year earlier. Operating profit booked KRW 564 billion (USD 591 million) with the profit margin of 8.1%, up from KRW 173 billion (USD 184 million) and 2.9% margin. Net Profit posted strong profits of KRW 422 billion (USD 442 million), successfully recovered from loss of KRW 123 billion (USD 131 million) from a year earlier, as equity method gains from earnings of its subsidiaries in overseas and investment in LG Display.
Business performances on a global basis by division are as follows
Mobile Communications Company posted the company’s record-high sales of KRW 3.327 trillion (USD 3.484 billion), 32.6% up from the first quarter 2007. From handset business, the sales reached KRW 3.195 trillion (USD 3.346 billion), 35.7% up from a year earlier. Shipment of handsets recorded the highest in unit sales as well, a total of 24.4 million, thanks to strong sales of “Viewty”, “Voyager”, “Venus” and other high tier flagship models. Shipment to emerging markets including Asia, China and Middle East region increased 36% on quarter and WCDMA sales in US, Korea increased 18% on quarter. Operating profit margin improved to 13.7%, 13.9% in handset division due to growth in premium models and increased productivity led to better profitability. Outlook for a quarter ahead continues bright in mobile handset unit sales. Various hit products and new line-ups including the third model in ‘Black Label’ series with design competitiveness and unique UIs, touch-screen and internet accessibility are expected to lead a growth in shipments of 20% higher than this quarter and double digit operating margin.
Digital Appliance Company sales increased 3.6% to KRW 3.047 trillion (USD 3.191 billion) on year and operating margin resulted in 4.7%. Decrease in the US market contraction from sub-prime effect, the company’s sales in other regions including Korea, Asia, Europe and Middle East regions lead overall increase. Slight decline in profitability was due to higher raw material prices. Entering high season of air conditioners, sales and profitability in coming quarter remains bright.
Digital Display Company sales jumped 32.1% to KRW 3.637 trillion (USD 3.808 billion) powered by rise in sales of flat TVs and monitors; LCD TVs 82%, Plasma TVs 18% and monitors 33% from a year earlier. PDP module sales grew 17% on year thanks to the company’s demand in plasma TVs and 32 inch line-ups to the company and other vendors. Operating profit successfully recovered to KRW 1.0 billion (USD 1.0 million).
Sales from Digital Media Company reduced 5.2% on year to KRW 1.310 trillion (USD 1.372 billion), but operating profit and margin increased to KRW 17 billion (USD 18 million) and 1.3% due to cost innovations in PC business.
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in over 110 operations including 81 subsidiaries around the world. With 2007 global sales of USD 44 billion, LG is comprised of four business units - Mobile Communications, Digital Appliance, Digital Display and Digital Media. LG is the world’s leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. For more information, please visit www.lg.com.