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Press Release

01/24/2008

LG ELECTRONICS REPORTS FOURTH QUARTER 2007 EARNINGS RESULTS

Seoul, January 24, 2008 - - LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended December 31, 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 921 per USD (2007 4Q), KRW 928 per USD (2007 3Q, QoQ), KRW 938 per USD (2006 4Q, YoY). Average rate of twelve month period in 2007 was KRW 929 per USD and KRW 955 per USD in 2006.

Seoul, January 24, 2008 - - LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended December 31, 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 921 per USD (2007 4Q), KRW 928 per USD (2007 3Q, QoQ), KRW 938 per USD (2006 4Q, YoY). Average rate of twelve month period in 2007 was KRW 929 per USD and KRW 955 per USD in 2006.

Sales and Profit on global basis
Thanks to stable operations from all business divisions, its sales soared to the company's record-high level. Sales in the fourth quarter of 2007 jumped 12.0% on year to KRW 10.91 trillion (USD 11.85 billion) and Net Profit on parent basis reached KRW 621 billion (USD 674 million). Operating profit recorded KRW 381 billion (USD 414 million), which makes the profit margin at 3.5%, 1.9% point higher than the previous year.

2007 annual sales increased 11.2% to KRW 40.85 trillion (USD 43.97 billion), and operating and net profit recorded KRW 1.23 trillion (USD 1.32 billion) and KRW 1.222 trillion (USD 1.315 billion). Consolidated sales including subsidiaries have risen 15.2% on year to KRW 53.38 trillion (USD 57.46 billion). Operating profit reached KRW 2.82 trillion (USD 3.04 billion), which makes the margin at 5.3%, 5.3% point higher than a year earlier.

Mobile Communication Company reached the company's record-high sales of KRW 3.050 trillion (USD 3.312 billion), 10.3% up from the fourth quarter 2006. From handset business, the sales reached KRW 2.917 trillion (USD 3.167 billion), 12.2% up from a year earlier. Shipment of handsets recorded the highest in unit sales as well, a total of 23.7 million. Shipment boosted in developed markets, thanks to strong sales of "Voyager" and "Venus" in United States and "Viewty" in EU. Operating profit margin improved to 8.7%, 8.8% in handset division, due to higher premium model portion and better cost competitiveness. Outlook for a quarter ahead continues bright in mobile handset unit sales and profits, expecting growth centered on emerging markets.

Digital Appliance Company sales rose 5.1% to KRW 2.473 trillion (USD 2.685 billion) on year, primarily due to continuous sales boost of commercial air conditioners in Korea and steady growth in India and Middle East & Africa regions. Operating margin resulted in 4.3% due to increased marketing expenditure.

Digital Display Company sales jumped to the company's quarterly historic high of KRW 3.968 trillion (USD 4.308 billion) which is 24.1% increase from a year earlier, powered by rise in sales of plasma and LCD digital TV. Operating loss reduced to KRW 11 billion (USD 12 million) primarily due to sales surge of flat panel TVs and improvement in PDP modules from robust 32 inch line-ups. Expecting price cuts in 40 plus inches large sized flat panel TV market and Beijing Olympic Games will boost the demand in 2008, launch of slim size and innovative design based plasma and LCD digital TVs will drive the company's strong growth. Sales from Digital Media Company reduced 4.1% on year to KRW 1.430 trillion (USD 1.553 billion), but operating profit and margin posted KRW 27 billion (USD 29 million) and 1.9% due to strong sales of media products.

Financial statement and Non-operating items on parent basis
Parent basis sales and operating profit are KRW 5.875 trillion (USD 6.379 billion) and KRW 154 billion (USD 167 million). Recurring profit and net profit jumped 1199% to KRW 767 billion (USD 833 million), and 1168% to KRW 621 billion (USD 674 million) compared to last year, thanks to equity method gain of KRW 779 billion (USD 846 million) from affiliates and overseas subsidiaries. LG.Philips LCD, its 37.9% stake owned subsidiary, booked gain of KRW 298 billion (USD 324 million) remarkable turnaround from a early earlier loss of KRW 21.3 billion (USD 23.1 billion).

2008 Sales Outlook
Goal for 2008 Sales is over 10% in USD increase from the performance of 2007. Prospects for the year are to continue to improve market leadership and profitability in handset and digital media and appliance business. Anticipated total shipments in handsets are 100 million units, an increase of 25 percent compared to 80.5 million units last year. In display division, LG aims to increase market share in flat panel display TVs, expecting to 17 million in unit sales, and turn around the company's position profitable in global market.

Anticipating the exchange rate to from KRW 900 per US dollar to KRW 885 per US dollar in 2008, the company plans to invest KRW 2.9 trillion (USD 3.3 billion) in total; KRW 1.2 trillion (USD 1.4 billion) in capex and KRW 1.7 trillion (USD 1.9 billion) in R&D, which are 6% and 1% increase on year.

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