LG Profits Drops 87%

2Q net profit drop from last year

Due to flagging sales of mobile phones and televisions, LG Electronics said on July 27 that second-quarter net profit plunged 87.3% from a year earlier.

Net profit was 108.4 billion won ($103.4 million) in April-June compared with 856.4 billion won a year earlier.

The second-quarter result, however, represents a return to profitability following two quarters of losses. "The turnaround in net profit reflected steady improvements in (our) businesses and successful cost-reduction efforts," the company, the world's third-largest mobile phone maker, said.

Sales fell 0.2% from a year earlier to 14.4 trillion won, while operating profit rose 25.3% to 158.2 billion won.

LG had failed quickly to roll out smartphones to rival Apple's market-leading iPhone and Samsung Electronics' Galaxy S.

The company said it would see modest growth in the third quarter.

"For the long-term, the company will continue to strengthen profitability through aggressive cost innovation and strategic investments in existing as well as new business areas," it said.

Analysts said that after a year of struggling in the competitive smartphone market, LG is set for continued profit growth due to increased sales of smartphones and three-dimensional televisions.

Copyright Agence France-Presse, 2011

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