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LG Electronics, a top global manufacturer of mobile phones and flat-screen TVs, said second-quarter net profit plunged as sales declined and its mobile phone business remained in the red.
LG earned 108.4 billion won ($103.3 million) in the three months ended June 30, the company said Wednesday. That was down 87.3 percent from net profit of 856.4 billion won a year earlier.
The result snapped two straight quarters of net losses for the Seoul, South Korea-based company, which has been making a push into 3D TVs and smartphones. LG has been trying to turn around its mobile phone business amid tough competition in the fast growing global smartphone market.
LG Electronics Inc. ranks No. 2 globally in flat screen televisions behind South Korean rival Samsung Electronics Co. LG trails global leader Nokia Corp. of Finland and Samsung to rank No. 3 in mobile phones.
Sales in the second quarter fell 0.2 percent to 14.4 trillion won.
LG’s mobile communications business, which includes phones, suffered its fifth straight quarterly operating loss in the second quarter. But in a sign of improvement the scale of red ink declined sharply on higher smartphone sales and cost-cutting.
The mobile business racked up an operating loss of 54 billion won, sharply lower than 101 billion won in the first quarter and 119 billion won in the second quarter last year. Sales fell 4.6 percent from last year to 3.25 trillion won.
LG said it sold 24.8 million mobile phones during the quarter, up slightly from 24.5 million in the previous three-month period. The company sold over 10 million Optimus smartphones in the first half of this year, according to company spokesman Ken Hong.
LG’s results were also hurt by a loss of 56 billion won from investments in affiliates including flat panel maker LG Display Co. and LG Innotek, which manufactures electronic components.
Results were brighter in TVs. LG’s home entertainment business saw sales decline 5.4 percent from the year before, but the unit recorded a profit of 90 billion won compared with a loss of 26 billion won the same quarter last year. Sales increased at the company’s home appliance and air conditioning businesses, though profitability weakened from the year before.
“We expect profitability of our television business to improve next quarter but overall sales and profits will likely decrease as we reduce shipments of lower-end phones to focus more on the high-end,” said LG’s chief financial officer David Jung, according to Hong, the spokesman.
Shares in LG Electronics gained 2.6 percent to close at 83,800 won.
Separately, rival Samsung Electronics said Wednesday that it has sold more than 5 million units globally of the Galaxy S II, the latest version of its flagship smartphone, since it went on sale in late April.
Stocks are mixed in midday trading, a day after the Dow Jones industrial average had its biggest gain this year. Traders are weighing concern about the U.S. debt limit against strong earnings from Apple and a slew of new deals.
Apple Inc. rose 3 percent after the company’s income doubled last quarter, trumping analysts’ estimates. Sales of the company’s iPhones quadrupled in Asia.
American Airlines’ parent company, AMR Corp., rose 2.4 percent after announcing an order for 460 planes, split between Boeing and Airbus. The new planes are expected to save money on fuel. Rising fuel prices left the airline with a loss of 85 cents a share, larger than analysts expected. The airline also said it would spin off its American Eagle subsidiary.
The Dow is down 10 points, or 0.1 percent, to 12,576 in midday trading. United Technologies Corp.’s dropped more than 2 percent, tugging down the Dow Jones industrial average.
The S&P 500 index is down 1 point to 1,325. The Nasdaq is down 11 points, or 0.4 percent, to 2,815.
Stronger profits from Coca-Cola Co. and IBM Corp. along with apparent progress in raising the U.S. debt limit prompted a stock market rally Tuesday. The Dow gained 202 points, its best day this year.
Clorox rose more than 3 percent after billionaire investor Carl Icahn raised his bid for the company to $80 a share. The consumer products company rejected his previous offer.
E-Trade Financial Corp. jumped 15 percent, the most of any stock in the S&P 500 index. E-Trade’s largest shareholder urged the online discount brokerage to consider putting itself up for sale. In a letter to E-Trade disclosed in a regulatory filing, the money manager Citadel LLC called for changes to the company’s board, saying E-Trade’s “phenomenal franchise” had been “squandered.”
The stock of Zillow, a real estate website, nearly doubled in its first day of trading. Zillow’s initial public offering priced at $20 late Tuesday. In early afternoon trading, it was trading at $39.
Cleaning and pest-control services company Ecolab Inc. said it would buy the water treatment company Nalco Holding Co. for $5.4 billion. Nalco soared 24 percent while Ecolab dropped 8 percent.
Tuesday’s rally turned the three major indexes positive for the month. The Dow and Nasdaq are now up more than 1 percent in July. The S&P 500 is up 0.4 percent.
Intel Corp. and American Express Co. are scheduled to report earnings after the market closes.
Boeing Co.’s long-delayed 787 completed its maiden trans-Pacific journey and landed in Japan, where the more fuel-efficient jet will undergo testing this week with All Nippon Airways in preparation for its first commercial launch.
The “Dreamliner” touched down at Tokyo’s Haneda Airport from Seattle early Sunday to applause and a white “Welcome to Japan” banner held by flight attendants and workers. Two fire trucks shot out celebratory arches of water as the aircraft approached the hangar.
ANA even offered a live video feed of the landing on Ustream. As of Sunday afternoon, the video had been viewed more than 37,000 times.
Pilot Masayuki Ishii said he stayed calm during the flight but grew emotional upon landing and seeing the excitement on the ground.
“I was moved beyond my own expectations,” he told reporters.
The 787’s much-anticipated arrival marks the near-end of a long wait by ANA, the first customer in line for the next-generation aircraft. Boeing missed the initial May 2008 delivery target and has repeatedly delayed its introduction because of problems in development.
The twin-engine jet is made mostly of carbon fiber and other composite materials instead of aluminum, making it lighter and 20 percent more fuel-efficient than other mid-sized airliners, according to Boeing.
As airlines around the world grapple with rising fuel prices, demand is high for low-consumption planes.
Chicago-based Boeing Co. has taken orders for 835 of the Dreamliners, and hopes to deliver the first one to ANA in August or September.
ANA has ordered 55 787s. Qantas and United Continental Holdings Inc. have each ordered 50, and Japan Airlines has ordered 35.
Rival Airbus’ competitor with the 787, the A350, is scheduled to enter service with Qatar Airways in 2013. Airbus has racked up nearly 600 orders for the new jetliner, which is also made mainly of carbon-fiber polymers.
ANA, the world’s eighth-largest airline by revenue, considers the Dreamliner an integral part of its global expansion efforts. Because of the 787’s range, ANA plans to use it on a number of new long-haul routes that were not previously commercially viable because there were not enough passengers to justify using larger aircraft such as the Boeing 747.
The cabin will have bigger windows and larger overhead compartments. ANA also says passengers will be more comfortable because air pressure during flights will be equivalent to an altitude of 6,000 feet instead of the conventional 8,000 feet.
Masami Tsukamoto, another pilot who flew from Seattle on Sunday, said the higher oxygen level made a noticeable difference on the nine-hour trip.
“Maybe part of it was because we were excited, but compared to regular flights from Los Angeles or San Francisco, I didn’t feel so tired,” he said.
The test aircraft will fly several of ANA’s domestic routes out of Tokyo this week to confirm the jet’s readiness for passenger travel. Maintenance crews will also practice refueling, towing and other routine servicing operations.
It is scheduled to depart for Seattle on Saturday, according to ANA.
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AP Airlines Writer Josh Freed in Minneapolis contributed to this report.
Longtime residents lost their bid to curb development in Downsview Park as the Ontario Municipal Board approved a plan for up to 10,000 new residential units on Wednesday.
The development will help fund the transformation of the 572-acre former military base into an urban park.
Residents concerned about traffic congestion and loss of green space requested that planners cut the previously approved 8,300 units by 830 in two particular areas. Instead, the board approved an amended city plan for an additional 1,700.
The Senate’s top Republican says throwing more tax revenue into the mix isn’t the answer as budget talks move into a new stage.
Senate Minority Leader Mitch McConnell tells ABC’s “This Week” that proposals to seek more tax revenue won’t pass Congress.
McConnell is set to meet with President Barack Obama on Monday evening, and he says the focus should be on proposals that can pass Congress.
Democrats want to raise some revenue by closing loopholes and trimming tax breaks for big companies and wealthy people payday loan lenders.
The Democratic leader of the Senate, Harry Reid, is meeting with Obama on Monday morning.
Talks between congressional leaders of both parties ended last week when Republicans walked out amid an impasse over the question of taxes.
A new report says Japan’s tsunami-ravaged nuclear plant was so unprepared for the disaster that workers had to bring protective gear and an emergency manual from distant buildings and borrow equipment from a contractor.
The report by plant operator Tokyo Electric Power Co. was released over the weekend and is based on interviews of workers and plant data. It portrays chaos amid the desperate and ultimately unsuccessful battle to protect the Fukushima Dai-ichi nuclear plant from meltdown Faxless payday loans.
The report shows that workers struggled with unfamiliar equipment and fear of radiation exposure.
TEPCO has been criticized for dragging its feet on venting and sea water cooling _ the two crucial steps that experts say could have mitigated the damage.
More than two-thirds of Canadian business owners and leaders will be in a position to retire over the next decade yet just half of companies are prepared for the Boomer-led exodus, a study shows.
The current climate of economic uncertainty isn
BYD Co., a Chinese car and battery maker backed by billionaire investor Warren Buffett, is moving ahead with a share offering meant to raise cash for a major expansion.
BYD said Wednesday in a notice to the Hong Kong Stock Exchange that it was beginning price consultations with investors after receiving regulatory approval for the initial public offering on the Shenzhen Stock Exchange.
The company plans to list 79 million shares, or 3.4 percent of its enlarged capital. MidAmerican Energy, a subsidiary of Buffett’s Berkshire Hathaway, holds a 9.9 percent stake in BYD.
BYD, which branched into auto making after becoming the world’s biggest battery maker, has been investing heavily in expanding its vehicle production capacity despite a 33 percent drop in its profit last year.
BYD postponed its listing in Shenzhen, China’s smaller, second market, last year in hopes of tapping a better market environment.
Proceeds from the IPO will go to a 2.2 billion yuan ($338 million) expansion mainly focused on an auto research, development and production base in the company’s hometown of Shenzhen, which borders Hong Kong.
The company also plans to build a lithium battery factory.
BYD launched China’s first homegrown hybrid vehicle, the F3DM, for the retail market in late 2008. Its inexpensive, conventional sedans are consistent best-sellers.
But auto sales have slowed recently and intense price competition has squeezed profit margins.
The company has branched into production of electric buses and energy storage systems. It says it also plans to launch an SUV and other higher-end vehicles, expanding its lineup to include more profitable segments.
BYD and Germany’s Daimler AG have a 50-50, 600 million yuan ($88 million) electric car joint venture.
Nobel Prize-winning economist Peter Diamond says he is withdrawing his nomination for the Federal Reserve board.
In an op-ed piece published on The New York Times website on Sunday, Diamond seemed frustrated by the confirmation process, detailing how President Barack Obama had nominated and re-nominated him to fill a vacancy on the seven-member board. Senate Republicans had blocked a floor vote on his confirmation and have questioned his practical experience and research.
In the op-ed piece, Diamond writes “It is time for me to withdraw, as I plan to inform the White House personal loans for people with bad credit.”
There was no immediate comment from the White House on Diamond’s plans.
He said he would continue as a professor at the Massachusetts Institute of Technology and would take advantage of opportunities presented to a Nobel laureate.