LG Electronics posts loss through EU price-fixing fine

LG Electronics posts loss through EU price-fixing fine

Summary: LG Electronics has posted a loss after being fined by Europe for price fixing.

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TOPICS: EU, Legal
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LG Electronics has posted losses within its Q4 2012 results due to a heavy fine imposed by the European Union over price-fixing allegations.

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(Credit: LG)

The world's second-largest television set maker by revenue posted its Q4 2012 financial report today, detailing its first loss-making quarter in a year. Net losses accounted for 468 billion won (US$429 million) in Q4 2012, in comparison to a loss of 112 billion won in 2011.

Consolidated revenues currently stand at 13.50 trillion won (US$12.4 billion).

LG also posted an operating profit of 107 billion won (US$98.84 million) in Q4, which is up 25 percent year on year, based on record smartphone sales of 8.6 million in comparison to Q3 sales of 7 million. Overall handset sales--including both feature phones and smartphones--rose 7 percent to 15.4 million units.

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(Credit: LG)

The electronics firm's mobile business achieved overall revenue of 2.81 trillion won (US$2.58 billion), up 15 percent quarter on quarter. LG also says that its customer base for "premium 4G devices"--such as the Optimus G--grew in Q4, and the company intends to capitalize on the expanding 4G market in Europe and in emerging markets this year.

However, profit margins in the television industry continue to slide. LG reported another quarter of losses within its television sector; 5.7 percent in Q2, 0.8 percent in Q3 and 0.3 percent in Q4. The firm says that it is not only strong competition from local rivals that has almost flatlined the television sector, but a weak yen has also contributed, despite "aggressive marketing efforts." LG plans to try to reinvigorate its decaying business by tapping into the premium television market and offer OLED and Ultra HD television sets in 2013, along with the sales of 3D and smart TVs.

In December, LG was fined 492 million euros (US$664 million) by the European Commission as part of one of the largest antitrust fines in history. Philips, LG Electronics, Panasonic, Toshiba, Samsung SDI, and Technicolor were all fined individually for an overall penalty of over 1 billion euros, after the EU decided that the companies had all been involved in a scheme to rig the prices of cathode ray tubes, used in both computer monitors and television screens. Panasonic plans to appeal the ruling.

Topics: EU, Legal

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