Flat screens push LG Electronics to first-quarter loss

Apr 19, 2007, 9:27 GMT

Seoul - LG Electronics Inc suffered a loss of 123 billion won (135 million dollars) in the first quarter as sales of flat-screen displays slipped, South Korea's second-largest electronics maker said Thursday.

LG Electronics reported the loss even as sales rose 4 per cent from the same quarter a year earlier to 6.03 trillion won. Strong sales of household appliances and mobile phones, however, were unable to stem the red ink in LG's flat-screen division.

The loss came after the company reported a profit of 150.8 billion won in the same quarter last year, but profits were already dropping in the final quarter of 2006, falling 85 per cent to 48.2 billion won.

The first-quarter earnings were less than market expectations, but the sales exceeded forecasts.

The poor earnings reflected a first-quarter loss of 169 billion won at LG.Philips LCD, a joint venture with Dutch Philips and the world's second-largest producer of liquid-crystal displays. The loss was attributed to a time of year when sales are traditionally poor.

In January, LG had predicted a 'rapid expansion' this year in the flat-screen market that would have the most effect on liquid-crystal displays. At the same time, however, it warned that price cuts spurred by intense competition in the industry would intensify.