EU fines help push LG to post quarterly lossLG Electronics, the world’s second-largest television maker, unexpectedly reported a wider fourth-quarter loss because of European Union price-fixing fines, slumping demand and a stronger won.
The company posted a 468 billion-won ($432 million) net loss, it said in a statement yesterday. That compares with a 112 billion won loss a year earlier. The company was expected to make a profit of 88.8 billion won, based on the average of 21 analyst estimates compiled by Bloomberg. Sales totaled 13.5 trillion won.?
The company and larger rival Samsung Electronics suffered as the nation’s stronger currency hampered efforts to compete against Japanese suppliers including Sony in the slowing global TV market. LG, which gets about half of its sales from TVs, was also fined 491.6 million euros ($660 million) by EU antitrust regulators in December after an industry-wide probe of cathode-ray tube sales.
“The TV business is unlikely to show any meaningful rebound in the near term, as the global economy is still frail,” Choi Nam-kon, analyst at TongYang Securities, said. “The weakening yen isn’t helpful either.”
The yen plunged about 10 percent against the dollar in the fourth quarter, the most among major Asian currencies tracked by Bloomberg, boosting earnings at Japanese exporters. The won jumped 4.4 percent in the period, curbing the repatriated value of overseas sales for Korean companies.
LG made an operating profit, or sales minus the cost of goods sold and administrative costs, of 107 billion won. The TV maker earns about 80 percent of its revenue overseas.?
The company, which also makes mobile phones, air-conditioners and appliances, has seen its stock drop 9.9 percent in the past year, compared with a 29 percent gain for Samsung and a 20 percent slump for Sony.
Samsung said on Friday that the stronger won will probably cut its operating profit by at least 3 trillion won this year. It also said global demand for smartphones will probably slow in 2013.
The EU also fined Philips Electronics, Panasonic and Toshiba following its investigation into a cartel for making now-obsolete cathode-ray tubes.
The penalties of 1.47 billion euros represented a record for the regulator. Bloomberg
More in Industry
Luxury loungewear is no longer just for lounging
KGC to work on a ginseng-based vaccine adjuvant
Hanwha Techwin continues selling CCTV systems overseas
Popeyes to close all branches in Korea this month
Contract signed for Covid-19 vaccine