LG Electronics posted a record quarterly loss in the fourth quarter as the company's handset business continued to struggle. The South Korean electronics giant hopes to kickstart new growth in 2011 with more high-end smartphones running Google's (NASDAQ:GOOG) Android platform.
The company, which is the world's No. 3 handset company by volume, reported a net loss of $229 million on a company-wide basis--a sharp reversal from its profit of $323.5 million in the year-ago period. Overall sales edged up 1.8 percent to $13.14 billion.
LG's mobile communications business, of which its handset unit is the dominant component, reported an operating loss of $245 million; the handset business reported an operating loss of $234.2 million. Handset sales dropped 15.2 percent year-over-year to $2.97 billion.
For the quarter, LG shipped 30.6 million units, up 8 percent from the third quarter but down 10 percent from the year-ago period, a harsh blow considering the holiday shopping season. The company said sales in North America, Europe and South Korea increased, partly due to the strength of its mid-range Optimus One Android smartphone. LG had cautioned in November that an upswing in its handset business likely will not happen until the first quarter.
LG has continually lagged behind the likes of Samung and HTC in smartphones, but is trying to close the gap. It recently announced the Optimus 2X, which packs a dual-core processor, as well as an ultra-thin phone, the Optimus Black. The company also plans to release an Android tablet, the G-Slate, through T-Mobile USA in the coming months.
LG said it expects the wider handset market to increase 8 percent this year, and that it will focus on premium smartphones, tablets and recovering cost competitiveness in feature phones.
- see this release
- see this Bloomberg article
- see this Dow Jones Newswires article (sub. req.)
- see this FierceWireless Q4 earnings page
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