LG ELECTRONICS REPORTS SECOND QUARTER 2007 EARNINGS RESULTS
LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended June 30, 2007. 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 929 per US dollar (2007. 2Q), KRW 939 per US dollar (2007 1Q, QoQ), KRW 950 per US dollar (2006. 2Q, YoY).
To accommodate comprehension of LG’s global business, the company released financial earnings on a global basis, hereinafter LG's global performance which pertains solely LG Korea and its overseas subsidiaries, excluding internal transactions.
Sales and Profit
LG posted record high sales in the second quarter 2007, thanks to Mobile Communications and Digital Appliance business.
Company recorded sales of KRW 10,430 billion (USD 11,227 million) on a global basis, which rose 12.6% from KRW 9,260 billion (USD 9,747 million) a year earlier, and KRW 5,903 billion (USD 6,354 million) on a parent basis.
Operating profit jumped 50.6% to KRW 464 billion (USD 499 million) from KRW 308 billion (USD 324 million) year on year on a global basis, and decreased to KRW 145 billion (USD 156 million) year from KRW 190 billion (USD 200 million) year on year on a parent basis.
LG.Philips LCD and overseas subsidiaries net profit boosted LG’s recurring and net profit to KRW 461 billion (USD 496 million) and KRW 385 billion (USD 414 million) by equity method gain at KRW 309 billion (USD 333 million). A year earlier the company recorded net loss of KRW 9.7 billion (USD 10.2 million) on a parent basis.
Performances by business division are as follows;
Mobile Communication Company Overall sales recorded KRW 2,865 billion (USD 3,084 million), 24.4% higher than a year earlier and operating profit of 11.3%, a jump from 0.4% YoY. Handset business showed great progress both on a YoY and QoQ basis. Sales improved a whole lot to KRW 2,709 billion (USD 2,916 million) by 26.9% YoY and 15.1% QoQ with profitability of 11.6% from loss of 0.7% YoY and gain of 4.7% QoQ mainly by premium product mix. Total shipments were 19.1 million units, which make accumulating sum of the two quarters to 34.9 million units.
Digital Appliance Company Strong performance in Digital Appliance business lead jump in sales of 21.4% YoY and 22.5% QoQ to KRW 3,604 billion (USD 3,879 million) and sustained the operating profit at stable level of 8.1%.
Digital Display Company Sales mainly from TVs and monitors posted KRW 2,727 billion (USD 2,935 million), 2.1% decrease from the figure from a year earlier, but operating loss of 5.1% proved improvement from the previous quarter through fixed cost reduction efforts and slower flat panel TV price decline.
Digital Media Company Sales mainly from media and IT products posted KRW 1,246 billion (USD 1,341 million), 0.3% increase from a year earlier. Slow in seasonality plus intensified price erosion led to profit decline.
Third quarter 2007 Outlook
Continued growth in handset business including WCDMA in emerging and developed market will lead stable shipment. Full scale global marketing for growing demands in 40 inches and larger flat panel TVs and value-added IT products will improve profitability.