Page last updated at 10:47 GMT, Monday, 21 July 2008 11:47 UK

High-end mobiles boost LG profits

Viewty phone with high-quality camera features
LG sold a record 27.7 million mobile phone handsets in the quarter

South Korean electronics firm LG Electronics has increased quarterly earnings by 84% with strong results in mobile phones and LCD joint ventures.

LG Electronics earned 706.9bn won ($694.4m; 347.8m) in the quarter to July, against 384.6bn won a year ago.

It sold a record 27.7 million mobile phone handsets, led by high-end Secret, Viewty and Venus models.

And liquid crystal display TV sales rose 86% from a year before while sales of plasma models were up 31%.

Global success

LG is the world's fourth-largest mobile maker after Nokia, Samsung Electronics, and Motorola, and ahead of Sony Ericsson.

Second-quarter operating profit margin in handsets was 14.4% on a global basis, better than 13.9% in the first.

The firm expects mobile phone margins to fall in the third quarter, although they should remain above 10%.

LG's success in the high-end sales bracket offers a strong contrast to smaller rival Sony Ericsson, which on Friday posted a 2m euros quarterly operating loss.

'Big question'

Sony Ericsson was hit by a fall in demand for its top-end phones and this has meant the sale of more low-end, less costly, phones.

And also on Friday Nokia slightly raised its forecast for the mobile phone industry, saying volume would grow 10% or more this year.

LG predicted revenues would dip in the third quarter, citing weak seasonal demand for appliances and the impact of the global slowdown.

"There are several risks in the second half of the year to 2009, which are the global downturn of the mobile phone market and the weakening display market due to a supply glut," said Jason Kang, analyst at Daewoo Securities.

"Whether LG can maintain the high margins it is seeing now for mobile phones is the big question for the latter half of the year."


SEE ALSO
LG Electronics suffers TV shift
23 Jan 07 |  Business
Flat screen TV sales boost Sony
27 Jul 06 |  Business
Firms slash flat-screen TV prices
01 Dec 05 |  Business

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