LG Electronics, South Korea's No.2 consumer electronics maker, saw operating profit in the fourth quarter improve from the previous quarter on the back of brisk sales of TV and home appliances, but it posted a net loss due to struggling mobile phone business. LG said in a statement that its operating profit during the October-December period reached 349 billion won (290 million U.S. dollars). It was up 18.7 percent from the previous quarter and up 26.8 percent from a year earlier. The fourth-quarter revenue was 14.56 trillion won, up 3.8 percent from the previous three months. The figure was down 4.7 percent from a year ago.
The tech behemoth posted a net loss of 140.4 billion won in the fourth quarter, turning into red from a net profit of 124.8 billion won in the third quarter. But, the fourth-quarter loss narrowed down from 205.7 billion won tallied a year ago. Robust sales of OLED and UHD TVs contributed to improved revenue and operating profit, but struggling handset business caused the shift into red in net income results. The home entertainment division, which makes TVs, registered 109.2 billion won of operating profit on revenue of 4.74 trillion won in the three months through December.
The revenue was up 11 percent from the previous quarter, overcoming difficulties such as soft global demand for TVs and unfavorable foreign exchange rates coming from weak emerging market currencies. The TV division's operating profit surged in the fourth quarter from 37 billion won in the previous quarter and 2.1 billion won a year earlier due to increasing demand for LG-manufactured products. The home appliance and air conditioner business posted 214.8 billion won of operating profit on revenue of 3.83 trillion won in the fourth quarter. The revenue rose 1.1 percent from a year ago on demand for its newly launched washing machine, and the profit more than doubled on expanded sales of premium products and reduced production costs.
The mobile communications unit, which manufactures smartphones, posted an operating loss of 43.8 billion won in the quarter, with revenue falling 0.4 percent from a year earlier to 3.78 trillion won. The company sold 15.3 million smartphones in the fourth quarter, contributing to total sales of 59.7 million units in 2015 that was slightly higher than 59.1 million units in 2014.
The vehicle components unit, which produces auto parts, recorded operating profit of 9.7 billion won on revenue of 520.4 billion won in the fourth quarter, logging the first operating profit since the company promoted it to one of its four major divisions in the first quarter of last year.
The auto parts business' revenue increased 9 percent from the previous quarter. For the whole year of 2015, revenue declined 4.3 percent to 56. 51 trillion won compared with a year earlier. Operating profit tumbled 34.8 percent from the previous year to 1.19 trillion won in 2015, and net profit dropped 50.3 percent to 249.1 billion won.
After peaking at 2.89 trillion won in 2009, LG's operating profit continued to drop to 241 billion won in 2010 and 339 billion won in 2011 each as it failed to trail the growing popularity of smartphones in the global market. The profit rebounded to 1.24 trillion won in 2012 and 1.83 trillion won in 2014 each, before falling again to 1.19 trillion won in 2015 amid stiffer competition in the smartphone market.
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