LG Electronics reports earnings for Q3 2007

Thanks to stable operations from all business divisions, its sales and operating profit recorded increase from a year earlier. Based on LGE global results, sales in the third quarter of 2007 jumped 11.8% to reach a total of $10.680bn. Operating profit was recorded to be $390m, which makes the profit margin at 3.6%, 1.3% point higher than the previous year.

LGE's Mobile Communication Company recorded sales earnings worth $2.839bn. This figure translates into an increase of 4.0% when compared to earnings recorded for the corresponding time period last year. The company's shipments of handsets were recorded to be highest in the company's unit sales thus reaching a total of 21.9 million.

This impressive figure is attributed to an increase in the number of emerging markets ready for penetration in Latin America, Asia/ and the Middle East. Despite increased portion of low end and ASP drop from mainstream models, improvements in cost structure have sustained decent profitability. Operating profit margin reached 8.4% at a stable level over last year. Outlook for a quarter ahead continues bright in mobile handset unit sales and profits, expecting a peak due to seasonality and rise in 3G.

LGE's Digital Display Company sales also jumped during this time period reaching a total of $3.416bn which translates 18.7% Year on Year (YoY) increase and 16.3% Quarter on Quarter (QoQ), This result is powered by a rise in sales of plasma and LCD digital TV at 17% QoQ and plasma panels at 21% QoQ. Operating loss was reduced to $31m QoQ primarily due to improvement in PDP modules geared by seasonal demand and new 32 inch line-ups and turnaround in flat panel TVs and monitor business division. Further growth is expected in the fourth quarter in 40 plus inches large flat panel TVs and great demand and popularity of full HD resolution models.

Sales from LGE's Digital Media Company increased 9.8% YoY to $1.440m geared by rise in desktop PCs in Korea and notebook PCs overseas. Operating profit and margin posted $31m and 2.2%, turnaround from a year ago. Shipment of IT products is expected to increase further and higher premium product portion to lead to better profitability in upcoming high-demand season.

LGE's Digital Appliance Company sales rose 11.4% to $3.001bn YoY, but declined 22.7% QoQ primarily due to low-demand seasonality. Sales in Korean market increased thanks to performance from premium products such as three-door refrigerators, and commercial air conditioners.

Parent basis sales and operating profit were recorded to be $6.131bn and $99m. Recurring profit and net profit jumped 1169% to reach a total of $417m, and 1394% to reach $365m compared to last year, thanks to equity method gain of $430m from LG. Philips LCD, its 37.9% stake owned subsidiary, and overseas subsidiaries.

Commenting on these earnings, Mr Kevin Cha, General Manager of the LGE Amman Branch said, 'This last quarter we did heavy promotions in Jordan and throughout the summer. Every buyer of digital Appliances DA and Digital Display DD products was in for a chance to win an award. We made sure we introduced new products with the Shine phone and several new models from the DD and DA line-ups. Ion this occasion we thank our local dealers and agents. Al Asalah have surpassed their target for this year and this quarter was indeed successful for LGE on both a global and domestic level and we are proud to be a part of that.'