Roundup: LG Electronics' Q1 operating profit recovers on smartphone sales

LG Electronics, S. Korea's No. 2 smartphone manufacturer, said Wednesday that its first-quarter operating profit recovered compared with the previous quarter thanks to robust sales of its G-series smartphones.

Operating profit was 305.2 billion won (286 million U.S. dollars) during the January-March period, up 10.9 percent from the prior three-month period. From a year earlier, the profit declined 36.2 percent.

The figure was roughly in line with market expectations on the back of brisk sales in smartphones. The company's global smartphone sales reached 15.4 million units, higher than any first- quarter figure in the past.

Revenue was 13.99 trillion won in the first quarter, down 8.4 percent from three months earlier. From a year ago, it inched up 0. 04 percent.

The company recorded a net income of 38.4 billion won in the first quarter from a net loss of 205.7 billion won in the previous quarter.

The upbeat earnings were attributable to strong demand for G3, the company's flagship smartphone. The mobile communications (MC) business, which produces smartphones, posted an operating profit of 72.9 billion won on revenue of 3.6 trillion won.

The operating profit turned into black from the loss a year earlier and was up 7 percent compared with the prior quarter. The revenue was up 5 percent from a year earlier, recording the largest since the company launched the smartphone business in 2010.

The home appliance & air solution (H&A) division, which makes washing machines, fridges and air conditioners, logged an operating profit of 229.3 billion won in the first quarter on revenue of 4.06 trillion won.

The revenue was down 2 percent from a year earlier amid the fiercer competition in North American region and weak emerging market currencies, but it increased 7 percent compared with the previous quarter.

The operating profit surged 148 percent during the quarter from three months earlier thanks to efforts to reduce production costs and a broader portion of premium products, the company said.

The home entertainment (HE) unit, which manufactures TVs, recorded an operating loss of 6.2 billion won in the first quarter on revenue of 4.44 trillion won.

The loss came amid seasonally weak demand for TVs and the weak currencies of emerging economies, especially of Russia and Brazil. The revenue declined 18 percent compared with the previous quarter.

The vehicle components (VC) business, which first unveiled its earnings this year, posted an operating loss of 2.4 billion won in the first quarter on revenue of 382.6 billion won.

The revenue jumped 33 percent from a year earlier due to solid sales of infotainment parts for cars, such as audio video navigation (AVN) and telematics.

The operating loss came as the company spent more money on research and development for electrical vehicle parts and other core parts used for cars.

LG is seeking to transform itself into a major auto parts company over the long run by first providing automakers with electronic parts and components.

The company expected its second-quarter earnings to improve on the back of seasonal demand for refrigerators and air conditioner, the launch of its new flagship smartphone G4 and strong sales of premium TVs. Endi