LG Posts Unexpected Loss As Higher Costs and Currency Offset Revenue Gains
Published on: 27th Jan 2014
Note -- this news article is more than a year old.
By: Ian Mansfield
South Korea's LG Electronics has reported an unexpected loss for the fourth quarter of last year after it was hurt by the stronger local currency as well as increased pressure on its smartphone business.
Fourth-quarter 2013 consolidated revenues were KRW 14.92 trillion (US$14 billion) with an operating profit of KRW 238.1 billion (USD223.89 million).
The company posted a net loss of KRW 63.5 billion (USD60.21 million) primarily due to higher non-operating expense as a result of currency movements. Last year the company also posted a loss, of USD429 million, mainly due to a European fine against the firm's display division.
The mobile phone division reported an increase in fourth-quarter revenues to KRW3.59 trillion (USD3.38 billion), compared to KRW 2.81 trillion (US$2.58 billion) a year ago.
Smartphone shipments of 13.2 million units represented an increase of 54 percent from the previous year -- when it had shipped 8.6 million devices.
The company warned though that the positive impact of improved product mix was offset by higher marketing investments to strengthen LG's brand equity and intensified price competition.
The mobile division posted a net loss of KRW43.4 billion (USD40 million) as a result.