LG who are struggling in the flat panel TV market following their disastrous $100 Million dollar ‘Scarlet’ TV failure late last year have announced losses of A$746 million. The Company has blamed foreign exchange losses and pricing pressure for flat-panel TVs.
While it is not known how much the Scarlet TV debacle cost the Company analysts are saying that it has contributed “significantly” to the Companies losses. It is also tipped that LG could get out of the plasma TV market following big declines in plasma sales.
At the recent CES Show in Las Vegas the TV product marketing manager for LG in Australia Warren Kim blamed Australian for having “poor design taste” for the failure of their Scarlet TV.
According to a Company press release, internationally LG reported sales of $4.84 billion for the quarter, an operating loss of $228 million and a net loss of US$493 million.
In the fourth quarter of 2008, sales on a global basis rose 22.5 percent year on year to $9.82 billion and operating profit was $74.2 million, resulting in a profit margin of 0.8 percent.
A big contributor for LG was the success of their mobile phone division.
For fiscal year 2008, annual sales on a global basis rose 20.8 percent to a record $36.2 billion with operating profit at $1.56 billion.
By operating unit, LG’s digital display company sales rose to $3.39 billion, an increase of 16.4 percent from a year earlier. Sales of flat-panel digital TVs grew 22 percent year on year and 26 percent quarter on quarter, but PDP module sales declined 44 percent year on year and 24 percent quarter on quarter.
Globally, operating profit saw a loss of $10 million primarily due to a sharp drop in the prices of TVs and slowdown in external sales of PDP modules. The company said it sees global demand in 2009 to be similar to 2008 as a result of growing low-end/small sized flat-panel TV demand in emerging markets and expects to expand its market share with stronger branding activities and product lineup, LG said.
LG’s mobile communication company reached a company high of $3.3 billion in sales, 34.6 percent higher than a year earlier. Handset sales accounted for $3.0 billion, up 40.3 percent year on year and 16.5 percent quarter on quarter.
Shipments of handsets recorded 8 percent growth year on year to 25.7 million, which resulted in a record 100.7 million units being sold in 2008 vs. 80.5 million units in 2007.