LG Electronics Posts Record Q4 Loss

Shares of LG Electronics pared losses after fears of sharper-than-forecast losses did not materialize.

LG Electronics posted a record $220 million loss for the fourth quarter, a result higher than a consensus forecast, but below a $300 million loss estimate by top-ranked analysts who cover the company.

The stock had dropped as much as four percent in early trade.

LG Electronics sold more phones in the October to December period, but margins stayed in negative territory, due to the lack of models to rival other smartphones like Apple’s iPhone or Samsung’s offerings.

The company resorted to slashing prices and marketing older phones to encourage phone sales.

LG Electronics‘ handset unit lost a whopping 262 billion Korean won, about $230 million.

Intense competition over the holiday season also saw its TV unit slipping to a near $110 million loss.

Analysts say LG’s late entry into the high-end smartphone market means the company could remain in the red in the first half of 2011.

Much will depend on global demand, as LG generates over 90 percent of sales abroad.

All eyes will now be on bigger rival – Samsung Electronics.

The world’s top TV maker and second largest handset maker reports earnings on Friday.

Foto: NTDTV