LG pushes handset unit back to profit in Q4

LG Electronics reported a fourth-quarter profit for its handset unit, its first in six quarters, and the company said that despite weaker overall sales it is making the transition to higher-end smartphones, especially those with LTE.

Click here for key slides from LG's fourth quarter earnings announcement.

The South Korean vendor, which also makes everything from refrigerators to TVs, posted a net loss of $99.4 million in the quarter, narrower than its loss of $228.5 million in the year-ago period. Sales in the company's mobile communications unit, which houses both its networks business and mobile phones, fell 17.9 percent year-over-year. Mobile phone sales slumped 19 percent to $2.4 billion. 

Nevertheless, the company's mobile communications unit posted an operating profit of $10.7 million, better than analysts' expectations of a $11.5 million loss, according to Bloomberg. LG's handset unit reported an operating profit of $8.9 million, bouncing back from a $233.5 million loss in the fourth quarter of 2010 and reversing quarters of being in the red.    

LG has been trying to emulate the success that its larger competitor Samsung has found, especially though its sales of smartphones running Google's (NASDAQ:GOOG) Android platform, but LG has been squeezed along with other Android vendors in the middle of the pack like Motorola Mobility (NYSE:MMI) and Sony Ericsson. Samsung, meanwhile, has surged to become the second largest smartphone maker in the world, just behind Apple (NASDAQ:AAPL).

LG shipped 17.7 million total phones in the quarter (it did not give a breakdown for smartphones), weaker than the 30.6 million it shipped in the fourth quarter of 2010 and down from its 21.1 million in the third quarter. Despite the weaker shipment volumes, LG said it was pleased with its improved product mix, including its premium Optimus LTE smartphone (of which it has shipped more than 1 million units) and other smartphones. The company said it plans to focus this year on "strategic markets" and expand its lineup of smartphones, especially LTE models.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article

Special Report: Wireless in the fourth quarter of 2011

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