Rebirth of LG
With LG Electronics’ TV and smartphone businesses reviving, the company is winging for rebirth.
The Korean tech giant announced on January 27 that it posted 14.9153 trillion won (US$13.8265 billion) in sales and 238.1 billion won (US$220.7 million) in operating profit in the final quarter of last year.
Its operating profit in Q4 of 2013 grew 9.3% from the previous quarter, helped by the increased profit of its TV business. The number for the last quarter in 2013 is more than a two-fold increase from the previous year (116.9 billion won US$108.4 million). Sales, on the other hand, climbed 0.8% year-on-year, and up 7.4% from Q3 of 2013, thanks to an increase in the sales of TVs and smartphones. Last year, its total sales amounted to 58.1404 trillion won (US$53.8962 billion), a 5.5% year-on-year gain, while its operating profit expanded 5.6% year-on-year to reach 1.2847 trillion won (US$1.1910 billion).
In 2013, the company was able to improve performance with operating profits in the range of one trillion won for the second consecutive year, amid an uncertain business environment. Its TV and smartphone businesses, which had been the major sticking point for the company’s growth, played a decisive role in its good performance.
By business unit, LG’s home entertainment division in charge of the TV business recorded 174.3 billion won (US$161.6 million) in operating profits in the fourth quarter, up 40% from Q3 2013 owing to increased sales of premium products such as OLED TVs and UHD TVs. Its sales in the final quarter of last year equaled 5.9275 trillion won (US$5.4948 billion), up 18% from the previous quarter, mainly because of a rise in LCD TV sales in advanced economies during the peak season.
Smartphone sales have continued to rise, contributing to an increase in revenue. The mobile communication division responsible for the cellphone business saw the number of LG smartphones sold in the fourth quarter of last year surpassing 13 million units for the first time. In particular, as the global sales of the G2, LG’s flagship smartphone, kicked into high gear, sales of LTE phones in Q4 increased 110% year-on-year, up 61% from the third quarter in 2013.
The division’s Q4 2013 earnings totaled 3.5915 trillion won (US$3.3293 billion), a year-on-year increase of 28%, and an 18% rise from the previous quarter. As a result, the mobile communication unit achieved sales in the range of 3 trillion won for 4 straight quarters. However, it experienced losses in operating profits for the second quarter in a row. The loss can be ascribed to increased investment in marketing aimed at strengthening LG’s position in the global market as a premium brand, together with a deepening price war between handset makers.