LG Electronics said it expects to report an operating profit of $439 million during its latest quarter, marking a 65.5 percent increase over the same period in 2015. But the health of its mobile business is still far from clear.
The South Korean company issued brief preliminary earnings for the first quarter of 2016, saying revenues likely fell 4.5 percent year-over-year to $11.7 billion. The predicted operating profit would be the highest in almost two years and would be a second straight positive quarter. It would also soundly beat previous estimates.
LG makes a wide variety of electronics and appliances, including TVs, refrigerators and telecom gear. Its mobile business has suffered, though, as growth in the worldwide smartphone market slows. The company's mobile division lost $36 million in the final quarter of 2015 as LG posted a net loss of $117 million.
In January, LG's mobile division reported $3.26 billion in sales during the fourth quarter, up 12 percent sequentially and flat year-over-year, buoyed by increased sales in North America. The company claimed only 4 percent of the worldwide smartphone market last year, according to estimates from IDC.
But LG is betting heavily on its G5, a flagship phone it launched last week. The high-tech gadget features a full metal body and a modular design that enables it to transform into a virtual reality headset, a 360-degree camera and a rolling home security device, among other things.
The company hasn't released early sales figures for the device, but The Korean Herald reported that an estimated 15,000 units were sold on the gadget's first day of availability in LG's home market of South Korea, three times as many as the preceding G4. LG didn't break out its profit estimates by business in its preliminary earnings.
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