LG Q1 earnings down, but phone sales are up

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LG Electronics today reported a solid first-quarter performance due to a resurging handset business which shipped 10.3 million smartphones between January and March, the highest for LG since it entered the smartphone race. The results from LG’s mobile operations offset less-than-expected results in the home entertainment business.

Q1 operating profit of KRW 350 billion (USD 322.88 million) and net profit of KRW 22 billion (USD 20.30 million) declined from the same period last year. However, revenues in the first quarter rose 6.8 percent year-on-year to KRW 14.10 trillion (USD 13.01 billion) mainly due to the improved performance of the mobile business.

LG Home Entertainment Company revenues of KRW 5.17 trillion (USD 4.77 billion) declined year-on-year due to lower sales of plasma TVs and IT products. Sales of LCD TVs increased in Europe and developing markets such as China from the same period last year. Operating profit of KRW 30 billion (USD 27.68 million), although lower than last year, increased compared to the previous quarter. Although TV and IT market will continue to be stagnant, LG expects stronger results with the rollout of new 3D Smart TVs and ULTRA HD TVs.

LG Home Appliance Company sales in the first quarter of 2013 increased 11 percent from the same period last year to KRW 2.81 trillion (USD 2.59 billion), largely due to improved sales in the United States, Central America and the Middle East. A 29 percent decrease in operating profit year-on-year to KRW 102 billion (USD 94.10 million) reflected increased investments in R&D and marketing. LG is looking to focus on strengthening its competitiveness and market leadership in a worldwide market with differentiated products and a strengthened product line-up.

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