* Q1 operating profit 448 bln won vs 304 bln won fcast
* Handset operating profit 35 bln won vs 10 bln won in Q4
* TV unit operating profit nearly doubles, margins up to 4.1
pct
* LG Elec shares up 1.5 pct vs 0.5 pct rise in KOSPI
By Miyoung Kim
SEOUL, April 25 (Reuters) – South Korea’s LG Electronics Inc
, the world’s No.2 TV manufacturer and fifth-biggest
mobile maker, more than trebled its quarterly profit as TV sales
picked up and its handset business swung to a profit.
Despite increasing sales of premium TV models that feature
3D and Internet-enabled functions, LG Electronics’ profit growth
is likely to come under pressure as competition gets tougher in
the handset market. Samsung Electronics Co, the
world’s top smartphone maker, is due to release a third
generation of its flagship Galaxy smartphone next week.
LG’s handset business reported a second consecutive profit
after six quarterly losses, marking a sharp improvement from a
100 billion won loss a year ago, but profitability remains near
breakeven as sales of its Optimus line-up failed to win
customers away from the Galaxy and Apple’s iPhone.
LG is also coming under increasing competition in the low
end handset market from China’s Huawei Technologies and
ZTE Corp , which already outsell the South
Korean firm in major markets, according to analysts. ZTE said
this week it could be shipping 100 million smartphones a year by
2015. A total of 472 million smartphones were sold around the
world last year, according to research firm Gartner, and Credit
Suisse has forecast sales will top 1 billion by 2014.
LG’s January-March operating profit jumped to 448 billion
won ($392.7 million) from 131 billion won a year ago, and
comfortably beat a consensus forecast for 304 billion won profit
by Thomson Reuters I/B/E/S. Profit in October-December was 23
billion won.
Profits from the TV division nearly doubled to 217 billion
won, and margins jumped to 4.1 percent.
In TVs – where LG had a more than 13 percent share of the
global market in the fourth quarter of last year, according to
DisplaySearch – the South Korean firm will launch a 55-inch flat
TV using next-generation organic light emitting display (OLED)
technology in several European countries in late May, well ahead
of an original plan to launch in the second half, a source
familiar with the matter told Reuters.
Shares in LG, valued at close to $12 billion, rose 1.5
percent on Wednesday after the earnings release, while the
broader market gained 0.4 percent. The stock has dropped
16 percent in the past 5 weeks, touching a 3-month low on
Friday, but it jumped 4.8 percent on Tuesday in its biggest
one-day gain since Feb. 2.
