LG Electronics Inc beat analyst estimates by doubling its fourth-quarter profit as heavy promotional activity lifted TV sales during the post-Thanksgiving holiday shopping kickoff known as Black Friday in the United States.<\/p>\n
As the $120 billion TV industry has peaked, the world’s No.2 television manufacturer is now aggressively pushing to increase sales of high-end TV sets that boast curved and crispy screens with price tags of $7,000 to protect margins.<\/p>\n
But earnings are set to be squeezed again this year as TV demand growth stagnates in the lucrative markets of advanced economies.<\/p>\n
A slow recovery in its handset business will also continue to weigh on earnings growth, overshadowing a widely expected margin recovery at its bread-and-butter home appliances operation as it plans to launch new fridges and washers.<\/p>\n
Operating profit totaled 238 billion won ($220 million) in October-December, the world’s second-biggest TV maker after Samsung Electronics Co Ltd said in a statement on Monday.<\/p>\n
That compared with the 223 billion won estimate of 35 analysts polled by Thomson Reuters I\/B\/E\/S, as well as the 117 billion won of a year earlier and 218 billion won of July-September.<\/p>\n
Shares in LG Electronics dropped 1 percent after the earnings announcement, versus a 1.2 percent fall in the wider market. The stock dropped 6 percent over the past six months, lagging a 1.5 percent gain in the KOSPI.<\/p>\n
The South Korean manufacturer said operating profit at its TV business reached 174 billion won from just 80 million won a year prior.<\/p>\n
Its mobile business, ranked No.3 by shipments after Samsung and Apple Inc, swung to an operating loss of 43 billion won from profit of 56 billion won a year earlier, as the company spent more on marketing flagship products such as its G2 and G Pro smartphones.<\/p>\n
The mobile loss came even after smartphone shipments grew to a record 13.2 million units, up 54 percent year on year.<\/p>\n
“The positive impact of improved product mix was offset by higher marketing investments to strengthen LG’s brand equity and intensified price competition,” the company said in a statement.<\/p>\n
LG plans to unveil the latest version of its large-screen G Pro smartphone next month, a segment widely expected to become more popular as Apple also works to introduce iPhones with larger screens later this year.<\/p>\n
LG said on Monday it was targeting 62.3 trillion won in 2014 sales, up 7 percent from a year earlier.<\/p>\n
($1 = 1,073.95 Korean won)<\/p>\n
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