LG reports solid phone sales, but weak profit margin

Today in Seoul, LG Electronics reported the Q4 2008 performance figures for its mobile phone business, LG Mobile Communication Company. LG reported a total of 4.49 trillion KRW ($3.3 billion) in total sales, which is up 34.6 percent from the fourth quarter of 2007. Cell phones accounted for 4.09 trillion KRW ($3.0 billion) of that total, which is up 40.3 percent from this time last year, and up 16.5 percent from Q3.

LG reports that it shipped 25.7 million cell phones in Q4, which is an increase of 8% from Q4 of 2007. LG has calculates that it has sold 100.7 million cell phones in 2008, which compares quite favorably to the 80.5 million units shipped in 2007, and should be enough to propel it firmly into the number 3 position past Motorola. Motorola has yet to report its quarterly earnings.

LG says that it's mobile division's profit margins dropped to 5.2 percent for the quarter due to an increase in marketing expenses intended to help it move existing inventory.

In spite of the poor global economic outlook for 2009, which Nokia expects to cause a 10% reduction in global phone sales, LG remains bullish on its own future, predicting both an increase in the number of units it ships and market share for 2009.