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LG posts highest fourth quarter earnings

LG Electronics, has reported record revenues and operating profits in the fourth quarter of 2009, reflecting the results of the company’s successful strategy and competitiveness during the current recession. Results for full year 2009 also showed strong revenue growth and record operating profits versus the previous year. The profit is said to be the highest for the company in its business history.

Sales and Profit
Record sales and operating profits were reported for the three months ending Dec. 31, 2009. Sales on a global basis (including LG’s overseas subsidiaries) rose 6.8 percent to KRW 14.3 trillion translating to USD 12.2 billion year_over_year. Operating profit was up to KRW 446.7 billion (USD 382 million) resulting in a margin of 3.1 percent, 2.3 percent points higher than the fourth quarter last year.

2009 annual sales on a global basis soared 12.5 percent to a company record_high level of KRW 55.5 trillion (USD 43.4 billion) with operating profit recording KRW 2.9 trillion (USD 2.3 billion). Consolidated sales including subsidiaries rose 15.3 percent year_over_year to KRW 73.0 trillion (USD 57.1 billion). Consolidated operating profit reached KRW 4.2 trillion (USD 3.3 billion), for a margin of 5.8 percent.

The LG Home Entertainment Company saw fourth quarter sales rise by 18 percent to KRW 5.9 trillion (USD 5.0 billion), returning an operating profit of KRW 271.6 billion (USD 232 million) for a margin of 4.6 percent, 5.2 percent points higher than the previous year, as a result of strong product leadership and rising demand for LCD TVs and Plasma TVs. Unit sales of total flat panel TVs jumped 52 percent year_over_year to 6.6 million sets from 4.3 million.

Quarter_over_quarter unit growth was also seen in both LCD TVs and Plasma TVs, 38 percent and 29 percent respectively. Annual sales reached KRW 19.6 trillion (USD 15.3 billion), jumping 19.9 percent from the previous year, mainly led by record unit sales of 19.5 million flat panel TVs. On the whole, profitability increased due to higher sales and more aggressive cost management.

The LG Mobile Communications Company reported sales of KRW 4.2 trillion (USD 3.6 billion) in sales, 7.4 percent lower than the 2009 fourth quarter. Operating profit of KRW 55.8 billion (USD 48 million) in the 2009 period resulted in a margin of 1.3 percent.

Handset revenues were KRW 3.9 trillion (USD 3.3 billion), a 5 percent decline from the same quarter in 2008, while operating profit reached KRW 66.5 billion (USD 57 million), resulting in a margin of 1.7 percent. Unit shipments of handsets saw an increase of 32 percent year_over_year and 7 percent quarter_over_quarter to 33.9 million units, which resulted in a record 117.9 million units being sold in 2009 versus 100.7 million units in 2008 due to robust growth in North America, Europe and emerging markets.

Price erosion and an increase in marketing expenses for year_end inventory clearance and emerging market channel expansion resulted in lower profitability compared to the third quarter. Yearly sales for the Mobile Communications Company increased 13.5 percent to KRW 18.2 trillion (USD 14.2 billion), with the handset division alone seeing an increase of 17.3 percent year_over_year to KRW 17.1 trillion (USD 13.4 billion).


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