LG Electronics reported strong year-over-year growth in its mobile business with a record 12.1 million smartphone shipments in the second quarter as its handset unit is starting to gain traction after several quarters of struggles.
Overall, the electronics conglomerate reported an 8 percent drop in year-over-year quarterly profit and a 10.1 percent increase in sales. However, the company's mobile business was a particularly bright spot, with sales rising 34.5 percent year-over-year to around $2.8 billion. The unit posted an operating profit of $54.6 million, compared to a loss of $25 million in the year-ago period.
LG's 12.1 million smartphone sales were above the previous record of 10.3 million it had in the first quarter and more than double the 5.7 million it had had in the year-ago quarter. The strength speaks to the market niche it has found with its Optimus G line and other high-end Optimus phones. LG spokesman Ken Hong said the company shipped 16.2 million total handsets in the quarter, including smartphones and features phones. That's up from 13.1 million in the year-ago period and flat from the first quarter of 2013, and reflects how many fewer feature phones LG and the wider industry are shipping.
LG said that while demand fell in its home market of South Korea, it found success with its mass-market Android phones in its L-series II and F-series. The company expects that the upcoming launch of its high-end G2 smartphone will help spark further sales in the third quarter.
"The G2 is set for distribution through most carriers in Europe and the U.S., including Verizon …we are getting a good response from our partners," CFO David Jung said during a conference following the earnings release, according to the Wall Street Journal. He didn't provide any sales targets for the G2. Jung's comments about Verizon Wireless (NYSE:VZ) as being a partner are notable, especially because the G2 reportedly has passed through FCC certification showing support for AT&T Mobility's (NYSE:T) spectrum bands, perhaps an indication that multiple carriers will support the G2.
Looking ahead, LG said in the third quarter it plans to enhances its "smartphone brand power by strengthening product competitiveness in the premium segment with the global launch of G2 while continuously increasing sales from mass-tier phones, L-series II and F-series." LG said earlier this month that future smartphones in its high-end premium series will carry only the "G" brand name.
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Article updated July 25 with additional information on LG's handset shipments.