LG Electronics saw a sharp jump in North American handset sales in the first quarter as it continued to improve its overall smartphone performance. The company's strength in smartphones was offset by a weak performance in its TV business.
Overall, LG said that its first-quarter net profit dropped 58 percent to around $36 million (38 billion Korean won), down from $87 million a year ago. The electronics conglomerate's TV division slipped to its first operating loss in more than four years.
LG's mobile business was a bright spot though. Sales decreased 5 percent year-over-year but climbed 5 percent from the fourth quarter to around $3.37 billion. LG said sales in North American jumped 66 percent year-over-year with stronger sales in mass tier smartphones like its L-series phones. LG also started selling its G Flex 2 smartphone in the U.S. during the first quarter.
LG shipped 15.4 million smartphones in the quarter, up 26 percent from a year ago. Overall, LG shipped 19.9 million total handsets (smartphones and feature phones), up from 16.4 million a year ago.
The mobile division posted a profit of $68.3 million, recovering from a $6.84 million loss a year ago. It was LG's fourth consecutive quarter of positive earnings for the unit. LG had a 2 percent operating profit margin in the mobile business, up slightly from the fourth quarter of 2014.
In the second quarter LG said that it plans to increase mobile revenues by strengthening its presence in the premium smartphone market with the launch of its new flagship phone, the G4, along with launching new models in the mass-market segment. The company aims to improve profitability with better cost competitiveness as well.
Verizon Wireless (NYSE: VZ), AT&T Mobility (NYSE: T), Sprint (NYSE: S), T-Mobile US (NYSE:TMUS) and U.S. Cellular (NYSE:USM) will all launch the G4. LG said the phone will launch tomorrow in South Korea and will eventually be available on around 180 carriers worldwide. Pricing and availability were not disclosed, but Sprint and U.S. Cellular said they will start selling the phone in June.
The G4 features improved performance and a high-end camera and will also come with a variety of leather back plates. Like the G3, the G4 is coming to market a few months after other premium phones, including Samsung's Galaxy S6 and S6 Edge, and the HTC One M9.
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