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LG Q2 profit doubles on TVs, phone business suffers loss

LG Q2 profit doubles on TVs, phone business suffers loss

By Reuters | Updated: 25 July 2012 10:43 IST

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LG Electronics Inc, the world's No.2 TV maker, said on Wednesday quarterly profit more than doubled on a jump in TV sales but its cellphone business swung to a loss, squeezed by growing competition from Apple and Samsung as well as low-cost producers in China.

April-June operating profit rose to 349 billion won from a 158 billion won profit a year ago, in line with a consensus forecast for 345 billion won by 21 analysts surveyed by Reuters. In the previous quarter, profit was 448 billion won.

LG's mobile phone business made a loss of 59 billion won after two profitable quarters. It has failed to break into the high-end market, dominated by Apple and Samsung, while increased competition from ZTE and Huawei has forced it to boost marketing costs for lower-end products.

Shares in LG, valued at over $8.5 billion, rose 0.2 percent after the earnings announcement, versus a 0.7 percent drop in the wider market.

The stock hit a nine-month low last week. It has fallen over 20 percent over the past three months, underperforming a 7 percent drop in the broader market.

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Further reading: LG, LG TV, LG mobiles