LG Profits Hit With Mobile Phone Investment

5th September, 2012.      //   Market Intelligence  // 

LG, the third-largest mobile phone maker, on Wednesday announced a 90 per cent drop in operating profit in the April-June quarter, hauled down by a loss at its handset division as it struggled to keep up with rivals in the smartphones race.

While the South Korean group promised “modest growth” in the third quarter, the weaker results are likely to fuel debate over the extent to which LG and other exporters could be further undermined in the second half by slowing demand, especially from Europe.

Net profit in the second quarter fell 33 per cent to Won856bn ($722m) from a year earlier while operating profit dropped to Won126bn, which LG blamed on the investment it was pouring into research and development and marketing.

Its handset unit posted an operating loss of Won120bn, from a Won620bn profit in the second quarter last year.

LG has vowed to overtake Samsung Electronics as the second-biggest maker of handsets by 2012. It has about 10 per cent of global share compared with Samsung’s 20 per cent…………


Extract from FT.com July 28th 2012

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