LG Elec. Saw Sharp Reversal in 1Q Profit

(아주경제 신기림 기자) World No.2 TV maker LG Electronics Inc. said Wednesday that it swung to a first-quarter net profit from a year-earlier loss, helped by a vast improvement in its flat-panel unit, and combined with foreign-exchange gains on overseas debt after the won's sharp rise during the quarter.

LG Electronics, the world's third-largest handset maker by shipments after Nokia Corp. and Samsung Electronics Co., posted a net profit of 674.6 billion won ($607.5 million) in the first quarter ended March 31, a sharp reversal from a loss of 199.9 billion won a year earlier.

The figure was higher than expected. A Dow Jones Newswires poll of seven analysts had on average forecast a net profit of 452.7 billion won.

Operating profit rose 2.6% to 529.4 billion won from 515.9 billion won a year earlier, while sales were up 3.7% at 13.7 trillion won from 13.209 trillion won.

"Its appliance and TV businesses are performing strongly and LG's mobile phone margin has likely hit a bottom," said Kim Ji-san, an analyst at Kiwoom Securities.

"Handset margins will improve in the coming quarters as the company beefs up its lineups in feature phones and smartphones."

Long-term outlook for the company hinges largely on when and how strongly its handset division regains its lost momentum.

LG chief executive Nam Yong, who sought $2.7 billion cost savings last year, said in a recent interview that only companies which win the smartphone war would survive for the next 10 years in the fast changing technology industry, underscoring his desire to reshape his company's struggling smartphone business.

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