Jan. 26 (Bloomberg) -- LG Electronics Inc., the world’s third-largest maker of mobile phones, reported its first loss in seven quarters after the company lagged behind Apple Inc. and Research In Motion Ltd. in the surging smartphone market.
The fourth-quarter net loss was 256.4 billion won ($229 million), compared with profit of 361.9 billion won a year earlier, Seoul-based LG said in a regulatory filing today. Revenue rose 1.8 percent to 14.7 trillion won.
LG said it aims to revive earnings by expanding its range of Optimus smartphones after the main mobile-phone division posted a third straight quarterly loss. The company plans 4.8 trillion won in capital expenditures and research spending to help boost revenue 5.8 percent to 59 trillion won this year.
“The operating loss at the handset division will drop in the first and second quarters this year as the company is ready to sell high-end smartphones,” said Han Eun Mee, an analyst at HI Investment & Securities Co.
The shares dropped 0.8 percent to close at 121,000 won in Seoul, while South Korea’s benchmark Kospi index climbed 1.1 percent.
LG’s results come a week after Apple posted a 78 percent increase in quarterly profit and Sony Ericsson Mobile Communications AB delivered fourth-quarter earnings that missed estimates. Top handset maker Nokia Oyj will likely report a 44 percent drop in profit when it discloses figures tomorrow, according to analysts’ estimates.
Mobile Losses
LG’s mobile division posted a 274.1 billion won operating loss, compared with the 321 billion won loss projected based on the median estimate in a Bloomberg News survey of six analysts.
Revenue from handsets fell 15 percent and the number of phones shipped declined 10 percent to 30.6 million, LG said. RIM overtook LG as the fourth-largest handset maker in terms of revenue last year, according to estimates at Bank of America Corp.’s Merrill Lynch.
The company has sought to make inroads in the smartphone market with its line of Optimus phones powered by Google Inc.’s Android operating system. In November, LG said the Optimus One became the company’s first smartphone to sell more than 1 million units in about 40 days after its debut.
LG’s full-year net income was 1.28 trillion won on a consolidated basis, compared with profit of 2.35 trillion won. Operating profit dropped 93 percent to 176.5 billion won, while sales climbed to 55.75 trillion won from 55.49 trillion won. LG agreed to pay a dividend of 200 won for each common share and 250 won per preferred stock, it said.
LG said it plans to invest 2.3 trillion won capital expenditure and 2.5 trillion won on research and development, up from a combined 3.6 trillion won in 2009.
--With assistance from Seonjin Cha and Saeromi Shin in Seoul. Editors: Young-Sam Cho, Garry Smith
To contact the reporter on this story: Jun Yang in Seoul at [email protected]
To contact the editor responsible for this story: Young-Sam Cho at [email protected].