LG DVD player unit's profit falls 85% - High-Def Digest Forums
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Old 01-23-2009, 07:16 AM
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Arrow LG DVD player unit's profit falls 85%

LG DVD player unit's profit falls 85%

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Holiday price cuts likely hurt margins

By Danny King -- Video Business, 1/22/2009
JAN. 22 | LG Electronics' digital media division, which includes DVD and Blu-ray Disc player operations, reported an 85% plunge in fourth-quarter operating profit as the company dropped the prices for its components to compete for holiday sales amid a slowing global economy.

The parent company, based in Seoul, Korea, reported a net loss largely on losses from both its overseas units and foreign exchange.

The division's operating profit was 4 billion Korean won ($3 million), down from 27 billion Korean won a year earlier, despite boosting sales 11% to 1.27 billion Korean won ($930 million), LG Electronics said late yesterday.

LG was among Blu-ray player makers that cut prices during the holidays to compete with Sony and Samsung, which dropped prices on their machines to less than $200 on the day after Thanksgiving, or so-called Black Friday, NPD Group unit DisplaySearch said last month.

The world's third-largest TV maker, LG also said its loss from its TV-making operations widened 27% despite a 16% jump in sales, also likely due to holiday price cuts. Liquid-crystal-display TV sales jumped 57% from a year earlier, while plasma TV sales fell 6%, LG said. The average price of a TV sold on Black Friday, was $676, down 19% from a week earlier and 3% less than the corresponding year-earlier day, according to DisplaySearch.

LG is trying to boost both Blu-ray and TV sales by taking a larger role in home-entertainment services, recently reaching agreements to make its high-definition TVs and Blu-ray players capable of video-streaming Netflix's digital titles.

Overall, LG had a fourth-quarter net loss of 671 billion Korean won ($493 million), compared to a net profit of 621 billion a year earlier primarily on a foreign-exchange loss as losses from its overseas affiliates and panel-maker LG Display, which is 38% owned by LG Electronics, more than offset a 23% jump in sales.
http://www.videobusiness.com/article/CA6631516.html
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Old 01-23-2009, 07:39 AM
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I guess that $585m fine they had to pay for the LCD price fixing scheme didn't help matters much, either.

Never did care for their products though.

http://www.engadget.com/2008/11/12/l...ake-585m-fine/
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Old 01-23-2009, 08:57 AM
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Originally Posted by furriballs View Post
I guess that $585m fine they had to pay for the LCD price fixing scheme didn't help matters much, either.

Never did care for their products though.

http://www.engadget.com/2008/11/12/l...ake-585m-fine/
Funny. There's no mention of that in the article. The fine was more then the 4th quarter loss. So without the fine, they would have made a profit in the 4th Q.

Thank goodness they were selling players or they would have really lost money.
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Old 01-23-2009, 09:02 AM
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Believe me they are not selling that many more BD players. The economy is in a serious rut right now and the last thing on consumers minds is a new dvd or blu ray player. You need to take a walk to your nearest Best Buy and see for yourself.

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Originally Posted by Htown-D View Post
Funny. There's no mention of that in the article. The fine was more then the 4th quarter loss. So without the fine, they would have made a profit in the 4th Q.

Thank goodness they were selling players or they would have really lost money.
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Old 01-23-2009, 09:05 AM
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I was in there last night picking up quite a few new blu movies.
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Old 01-23-2009, 09:08 AM
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The purpose of the post was to lay blame for LG's economic woes on blu-ray. When clearly, without the fine for the unscrupulous price fixing they got caught doing, they would have made a profit.

A profit despite current market conditions.
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Old 01-23-2009, 09:11 AM
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Originally Posted by Htown-D View Post
The purpose of the post was to lay blame for LG's economic woes on blu-ray. When clearly, without the fine for the unscrupulous price fixing they got caught doing, they would have made a profit.

A profit despite current market conditions.


Holiday price cuts likely hurt margins

Quote:
By Danny King -- Video Business, 1/22/2009
JAN. 22 | LG Electronics' digital media division, which includes DVD and Blu-ray Disc player operations, reported an 85% plunge in fourth-quarter operating profit as the company dropped the prices for its components to compete for holiday sales amid a slowing global economy.
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Old 01-23-2009, 09:12 AM
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Originally Posted by Lee Stewart View Post


Holiday price cuts likely hurt margins
I don't think they cut margins over 500 million for the holidays.
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Old 01-23-2009, 09:14 AM
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Originally Posted by Htown-D View Post
The purpose of the post was to lay blame for LG's economic woes on blu-ray. When clearly, without the fine for the unscrupulous price fixing they got caught doing, they would have made a profit.

A profit despite current market conditions.
BBC News had a story last night about the problems LG and Samsung are facing with the dramatic drop in their sales. Appears that both Korean companies are hurting and this year doesn't look to be any better. Blu ray wasn't mentioned in the BBC story, but LCD's were mentioned and how big a drop in sales those things are taking from these two. I'm sure we'll see a lot more stories this year about other companies and how their profits are going to go south.
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Old 01-23-2009, 09:15 AM
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Originally Posted by Htown-D View Post
I don't think they cut margins over 500 million for the holidays.
That fine had nothing to do with their optical disc player division and the drastically reduced profits that division made.
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