LG Electronics swings to profit on record mobile phone sales

LG Electronics said Wednesday it turned a net profit in the first quarter after a loss the year before, boosted by record mobile phone sales, strong performance overseas and gains from its investment in flat panel maker LG Display.

LG Electronics Inc., the world's fifth-largest manufacturer of mobile phones, said in a statement that it earned 422 billion won ($427 million) for the three months ended March 31. LG posted a net loss of 123 billion won in the same quarter of 2007.

The first-quarter result was slightly worse than expected. The average of seven analysts surveyed by Dow Jones Newswires forecast LG to report a profit of 429 billion won ($435 million).

Sales during the quarter rose 14.8 percent to 6.9 trillion won ($7 billion), LG said.

The company said it sold 24.4 million mobile handsets in the quarter, a record performance.

Phone sales were led by the high-end Viewty, Voyager and Venus models, LG said. Handset sales in emerging markets including Asia and the Middle East rose 36 percent from the fourth quarter of last year, the company said.

"We expect handset sales to exceed 100 million in 2008," Jung Do-hyun, chief financial officer, told an analysts' conference, according to LG spokeswoman Judy Pae.

The company had said in January it expected shipments of 100 million handsets for a 25 percent increase over 2007's record 80.5 million total.

LG manufactures a variety of products including plasma televisions, personal computers, and refrigerators and other household appliances.

Last year's first-quarter loss came amid weakness in LG.Philips LCD Co., the predecessor of LG Display Co. LG Electronics owns 37.9 percent of LG Display, which last week reported that it swung to a net profit in the first quarter amid booming demand for flat panels.

LG.Philips, originally a joint venture between LG Electronics and Royal Philips Electronics NV of the Netherlands, changed its name in March to reflect a reduction in shares held by Philips.

Shares in LG Electronics fell 0.4 percent Wednesday to finish at 132,500 won (US$134). The company released earnings about 45 minutes before the stock market closed.