LG profit rose 46.4 percent in 2014

LG Electronics saw its profit rise 46.4 percent for 2014 thanks to improvements in its handset and TV business during the year.
Written by Cho Mu-Hyun, Contributing Writer and  Chris Duckett, Contributor

South Korea's second-largest electronics maker posted an operating profit of 1.82 trillion won and revenues of 59.4 trillion won, a rise from the previous year of 46.4 percent and 4 percent, respectively, LG said in its earnings guidance.

For the fourth quarter alone, the company posted operating profits of 275 billion won and revenues of 15.27 trillion won, a rise of 28.4 percent and 4.9 percent, respectively.

However, it is a drop of 40.8 percent and a minor increase of 3.8 percent compared to the third quarter. Its flagship G3 smartphone, which was highly popular when launched early in the year, lost steam during the fourth quarter due to rivals Samsung and Apple launching their flagship products. Slowdown in the South Korean market due to newly implemented subsidy limits was also detrimental to growth.

LG's mobile division contributed 67.4 billion won in operating profits, allowing it to stay in the black for the third straight quarter. Results for the first quarter for 2015 are expected to also grow, despite it being low-demand season thanks to new products such as the G Flex 2, the company said.

LG said there is high anticipation from global mobile carriers for its upcoming G4 smartphone, anticipating growth thanks to expansion of long-term evolution (LTE) phones this year.

It also reiterated that there is no overheating problem from Qualcomm's Snapdragon 810 system on a chip, which will be on the G4.

Analysts have said previously that LG will face a tough time in the smartphone market over 2015, thanks to increased competition.

"Due to strong competition of North American smartphone market after the iPhone 6 release in September, LG's Mobile Communication division's rate of return in the fourth quarter is to record 2.4 percent, 1.5 percent fall from the third-quarter," Eugene Securities analyst Yoon Hyuk-jin said last month.

The company's automobile division, called the Vehicle Components division, was also faring very well, and LG said it will for the first time reveal revenue and profits of the division for the first quarter this year.

Last week, Korea's largest electronics maker Samsung Electronics reported a 40 percent decrease in yearly profits for its mobile division, with profit in the fourth quarter plummeting by almost two thirds.

For the entire company, Samsung Electronics' full-year operating profit was down by 11.8 trillion won to 25 trillion won.

The only segment of Samsung that saw any sales or profit growth was the semiconductor business, which grew its yearly profits by 1.89 trillion won to 8.78 trillion won, and saw sales for the full year jump by 6 percent to 39.73 trillion won.

Source: ZDNet.co.kr

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