14 DAY TRIAL // LG Electronics announced its earning results for the first quarter of 2008, a period more than profitable for the company. Both sales and operating profit reached a record level for the company, a leader in consumer electronics and mobile communications. Stable operations from all business divisions made it possible for LG to reach the high profit level, but most of the earnings came from sales in handsets and flat panel TVs. On global basis, sales rose 16.9% a year to $11.747 billion, while the operating profit recorded $634 million. That gets the company's profit margin to 5.4%, 5.1% point higher than last year.
Sales jumped during the first quarter from $6.425 million to $7.253 million, making a 14.8% rise comparing to the previous year. Operating profit rose to $591 million with the profit margin of 8.1% from $184 million and 2.9% margin the year earlier. Net Profit made a huge recovery from $131 million last year to strong profits of $442 million.
On a global basis, business performances by division are the following. Record-high sales are posted by Mobile Communications Company. These go up to $3.484 billion, 32.6% higher than the first quarter 2007. 35.7% up comparing to last year for handset business, to a total of $3.346 billion. Handsets recorded the highest level in unit sales shipment with a total of 24.4 million. Models like "Viewty", "Voyager", "Venus" and other high tier flagship ones are those who booked strong sales and made the profits possible.
Emerging market shipments are 36% higher on quarter and WCDMA sales increased 18% on quarter. Thanks to growth in premium models operating profit margin improved to 13.9% in handset division, while increased productivity drove better profitability. More increases are expected for the mobile handset unit sales in the next quarter. At least a 20% growth in shipments is expected for various hit products and new line-ups. The 'Black Label' series third model with touch screen, Internet accessibility, new design and unique Uis is one of the models that is likely to double digit operating margin.
Digital Appliance Company sales rose 3.6% to $3.191 billion a year and operating margin was 4.7%. Though the company registered some decrease in the US market contraction from sub-prime effect, sales in regions including Korea, Asia, Europe and Middle East regions lead overall increase. Higher raw material prices lead to a slight decline in profitability, but there seems to be a bright quarter ahead, as it is air conditioners season.
Digital Display Company recorded sales increase 32.1% to $3.808 billion due to rise in sales of flat TVs and monitors; LCD TVs 82%, Plasma TVs 18% and monitors 33% comparing to the year earlier. PDP module sales rose 17% from a year earlier thanks to demands in plasma TVs and 32 inch line-ups to the company and other vendors. Operating profit recovered to $1.0 million.
Digital Media Company recorded sales reduced to $1.372 billion, 5.2% on year, though there was a 1.3% increase to $18 million on operating profit and margin thanks to cost innovations in the PC business.