LG swings to huge Q4 loss on weak demand

LG swings to huge Q4 loss on weak demand
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First Published: Thu, Jan 22 2009. 11 44 AM IST
Updated: Thu, Jan 22 2009. 11 44 AM IST
Seoul: South Korean handset and appliance maker LG Electronics Inc reported its first net loss in seven quarters, hit by heavy losses at its flat-screen affiliate and weak business in mobile phones.
LG reported on Thursday a won671.3 billion ($489.5 million) net loss for October-December, much steeper than a consensus forecast of a won172.3 billion net loss from eight analysts polled by Reuters.
The result compares with a net profit of won621.3 billion a year ago and won24.9 billion in the third quarter.
The mobile phone market is forecast to shrink fast this year on a global recession and makers are mired in margin-crushing competition, with LG seen focusing more on low-priced models.
LG is expected to swing back to profit in the first quarter helped by strong seasonal appliance sales, but the longer-term outlook remains gloomy on anaemic consumer demand.
Shares in LG dropped 31% in the fourth quarter, underperforming the wider market’s 22% fall.
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First Published: Thu, Jan 22 2009. 11 44 AM IST