LG Electronics, the world's second-largest maker of televisions, posted an unexpected fourth-quarter loss on the impact of a rising South Korean won and marketing costs for its high-end G2 device.

The net loss, excluding minority interests, was 63.4 billion won (€43 million) in the three months ended December 31st, the Seoul-based company said this morning.

LG boosted promotion of the G2 as it targets increased sales of more profitable high-end devices, a market that is slowing amid near saturation and competition from Apple, Sony and Samsung Electronics. The company is adding new ultra high definition TV sets as its range of cheaper smartphones face new competition from Chinese producers and the Korean won strengthened.

“LG’s product differences from other second-tier peers, such as Sony and Chinese makers, doesn’t seem all that outstanding,” Greg Roh, an analyst at HMC Investment Securities in Seoul, said before the announcement. “The smartphone industry is entering the initial stage of maturity. It’s still in doubt whether the second-tier players can see a meaningful turnaround in earnings any time soon.”

LG fell 1.9 per cent to 68,500 won as of 1:28 p.m. in Seoul trading, while the benchmark Kospi index fell 1.5 per cent. Operating income, or sales minus the cost of goods sold and administrative expenses, was 238.1 billion won in the fourth quarter. That beat the 210.8 billion won average of analyst estimates. The company is targeting sales of 62.3 trillion won in 2014 after posting revenue of 58.1 trillion won last year.

Bloomberg