South Korea based LG Electronics posted a net loss for its 2013 fourth quarter, as its earnings were hit hard by the strengthening Korean won and large expenses in advertising for its G2 5.2-inch Android flagship smartphone.
LG, based in Seoul, is the second largest TV maker in the world trailing just Samsung Electronics. Its loss was 63.5 billion won, which is equal to $60.4 million.
The loss for the quarter was an improvement over the 478 billion won loss from the same period in 2012, but fell from a net profit of more than 108 billion won during the 2013 third quarter.
Operating profit, nevertheless doubled to over 238 billion won for the quarter, compared to 117 billion won for the same reporting period in 2012. This beat the estimate of 223 billion by market analysts.
Operating profit is often used as a yardstick of the corporate health of a business since it shows core operations performance, excluding some other factors such as investments.
Sales overall at LG were up marginally to end the quarter at 14.92 trillion won, compared to last year during the same quarter of 14.80 trillion.
LG’s mobile division reached 13.2 million units sold of smartphones during the quarter, which was 54% higher from the fourth quarter of 2012. LTE sales were up 110%, but that unit also posted a loss in operations of 43.4 billion won, compared to a 56.4 billion won profit in the fourth quarter of 2012.
LG said its results were due to higher expenses in brand marketing and a more intense competition in pricing across the market.
LG announced it expects the smartphone market will continue to grow, especially in the LTE phones market, with the competition growing more intense.
One of its latest weapons in the market is the G Flex, Which the company claims is the first smartphone that is curved. The phone has a concave 720-pixel OLED 6-inch display and will hit the U.S. market in February with carrier availability on Sprint, T-Mobile and AT&T.
It its report for earnings rival Samsung also said the buoyant won had depressed its overall performance.
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