LG Quarter 2 2005 Losses

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LG reported a net loss of $10.1 million on static sales of $6.1 billion in the second quarter on lackluster handset shipments and poor performance in its liquid crystal display joint venture with Philips Electronics. The net loss stands in contrast to the vendor’s year-ago quarterly profit of $157 million. Sales were marginally better than the $5.75 billion in the year-ago quarter.

Handset revenue accounted for about one-third of the electronics conglomerate’s total revenue; LG also makes durable goods and consumer electronics products. A poll of financial analysts by Reuters had expected a net profit of about $80 million. According to CIBC World Markets, LG will likely miss its 2006 handset shipment volume forecast of 70 million units; the firm suggested 65 million to 67 million may be more realistic.

LG’s “Chocolate” mobile phone has not triumphed in Europe, despite popularity marketing ploys to boost visibilty. Yet the company said the phone’s success overseas is “the key for further success.” W-CDMA handset shipments face competition as well.