LG Electronics, one of the world’s biggest mobile phone makers, proved it was fully back in the game after recording a 7 percent rise in sales in the first quarter on account of robust handset sales.
The company said it shipped 10.3 million smartphones between January and March, its highest number yet since entering the smartphone race in 2009.
The turnaround was dramatic, as sluggish handset sales ― under the mobile communications unit ― had previously been criticized for being responsible for LG’s lackluster performance.
Park Jong-seok, LG Electronics mobile communications chief
The unit’s operating profit sprang fourfold compared to the same period last year to reach 132.8 billion won ($118.7 million), which was also more than double the profit posted in the fourth quarter of last year to make mobile communications the company’s most profitable unit in terms of operating profit.
It also marked the first time for the unit to record a quarterly operating profit in the 100 billion won range since the third quarter of 2009, when the company belatedly jumped on the smartphone bandwagon.
“Healthy sales of LTE smartphones such as the Optimus G and Optimus G Pro along with 3G smartphones including the Optimus L Series and Nexus 4 contributed to the improved results,” LG Electronics said in a statement.
The electronics maker expected to see further increases in the shipment and sales of smartphones in the second quarter following the global release of the Optimus L Series II.
In total, the company recorded sales of 14.1 trillion won, and an operating profit of 349.3 billion won when including LG Innotek, which started to be included in the electronics maker’s consolidated financial statements as of the end of last year.
The figures were slightly above the market forecasts.
“LG Electronics has become quite attractive, now that the handset unit is finally growing, and at a rapid speed,” said Kim Yoon-ho, an analyst with Hanwha Securities. He added that the upward curve for the company’s total revenues was likely to continue on into the second and third quarters of this year based on the brisk advance of the mobile communication department.
LG Home Entertainment Company, meanwhile, suffered a decline on decreased sales of plasma TVs and IT products, the company said.
LG Electronics stocks inched down 0.44 percent on Wednesday to end at 90,000 won.
By Kim Ji-hyun (
jemmie@heraldcorp.com)
