LG Electronics Inc suffered a loss in the final quarter of last year because of the stronger South Korean currency, while higher marketing costs and falling smartphone prices continued to batter its mobile business.
The South Korean technology company said yesterday its net loss from October to December was 63.4 billion won (US$58.5 million).
That is far smaller than a 478.2 billion won loss a year earlier, but analysts polled by FactSet expected net income of 147.8 billion won. Sales for the fourth quarter inched up 1 percent from a year earlier to 14.9 trillion won.
The maker of the G flex smartphone said the quarterly loss, the first in four quarters, was mainly due to foreign exchange movements.
The company blamed the strong local currency against the US dollar and the Japanese yen, as well as fluctuations in currency rates that usually mean higher costs.
LG’s mobile communications business lost 43.4 billion won, staying in the red for a second quarter, despite higher sales from increased smartphone shipments. Shipments of its flagship G2 and other smartphones reached 13 million units in the quarter, a record high for the company.
LG attributed the mobile division’s loss to increased spending on marketing and declining smartphone prices, an issue that nags other mobile phone vendors as growth in smartphone sales slows in developed countries.
Profit at LG’s flagship TV business surged to 174.3 billion won from a mere 800 million won a year earlier, thanks to improved developed-country sales of LCD TVs and efficient marketing spending, LG said.
For this year, LG forecast a 7 percent gain in annual revenue and about a 20 percent increase in capital spending.
The company said it has budgeted 3 trillion won for capital expenditure for this year.
The company’s guidance for last year’s capital spending was 2.5 trillion won.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by