LG Elec Q3 net jumps on LCD venture, handsets

By Staff
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Google Oneindia News

Seoul, Oct 16: Appliance and handset maker LG Electronics Inc posted a better-than-expected 15-fold rie in quarterly profit on Tuesday, lifted by a recovery in its LCD flat-panel venture and solid mobile phone sales.

But operating profit came in at half the level expected, prompting shares to give up early gains and drop into the red.

Shares in LG, valued at around $15 billion, were down 0.44 percent at 90,500 won by 0527 GMT, after gaining as much as 4 percent, against the wider market's 0.88 percent fall.

A better-than-expected recovery at LG.Philips LCD Co Ltd, the joint venture with Dutch company Philips, in which it owns a 38-percent stake, and solid handset sales offer a reassuring 2008 picture for LG.

Although still in the red, LG's plasma business is expected to continue its recovery on the back of stronger demand, especially for 32-inch flat TVs, a format popular in developing markets such as China.

LG, which competes with home rival Samsung Electronics in handsets, screens and appliances, reported a net profit of 339 billion won ($369.4 million) in the quarter ended Sept. 30, from 22.7 billion won profit a year earlier.

The figure was comfortably above a consensus forecast of 280 billion won by 10 analysts polled by the source.

But operating profit on a parent basis was a mere 92.4 billion won, much less than the 178 billion won anticipated by the source's Knowledge survey of 19 analysts.

LG's display division, which posted a steep 24.2 percent loss margin on a parent basis in the second quarter, reported a loss margin of 11.5 percent this time, helped by rising demand for flat-screen TVs in the run up to the gift-giving season.

LG, the world's fifth-biggest mobile phone maker after Nokia , Samsung, Motorola Inc. and Sony Ericsson, sold 21.9 million phones in the third quarter, better than the 19.1 million sold in the second.

The mobile phone division posted a profit margin of 8 percent on a parent basis, down from 11.3 percent in April-June but much higher than 3.7 percent in the year-ago period.

LG shares rose 11.9 percent in the third quarter, in line with the wider market's 11.6 percent rise.

REUTERS>

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