LG Electronics said that its fourth-quarter deficit widened due to losses in its equity ties with a display-making affiliate, while its mobile business remained in the red. The tech giant said it logged a net loss of $717 million in the October-December period, compared with a $67.7 million net loss a year earlier, Yonhap news agency reported. The company's operating profit increased by 34.5 percent on-year to 101.8 billion won in the fourth quarter, but this was an 87 percent drop compared to the previous quarter. Sales rose 1.8 percent on-year to $13 billion in the last three months of 2019. For the whole of 2019, LG Electronics' net income tumbled 87.8 percent on-year to $150.9 million.
Operating profit dropped 9.9 percent on-year to $2.01 billion, but sales inched up 1.6 percent on-year to a record $52 billion. LG Electronics said its equity ties with LG Display Co. hurt its bottom line. The company holds a 37.9 percent stake in the world's leading OLED panel maker. LG Display, which is scheduled to announce its fourth-quarter earnings on Friday, has been suffering from falling LCD panel prices.
Analysts here expect LG Display to suffer more than $839 million in losses in 2019. Aside from equity losses, LG Electronics saw its mobile business extend a slump to 19 consecutive quarterly losses. LG Electronics' mobile business unit posted $278 milion in operating loss in the fourth quarter, widening from a loss of $267 million a year earlier. The unit's sales plunged 21.2 percent on-year to $1.09 billion.
For all of 2019, its mobile business had sales of $4.9 billion, down from $6.62 billion in 2018, while the operating loss was tallied at $847 million, also widening from $661 million in 2018. Analysts here predict that LG Electronics shipped only 29 million smartphones in 2019, down 28 percent from a year earlier.
"Sluggish sales of mass-tier smartphones in overseas markets, increased marketing expenses, and retail inventory adjustments led to operating loss in the mobile business," the company said.