LG suffered notable declines in its mobile business with sluggish sales, shipments and margins, though the company promised to reverse the trend with investments in smartphones and global expansions.
LG's overall sales rose slightly, by 3.7 percent, from the year-ago period, and its overall profit also increased by 3 percent during the same timeframe--buoyed by its appliance and TV divisions. In LG's mobile communications business--which houses its cell phone and network operations--the company reported a year-on-year decline in sales of around 19 percent, though the unit's operating margin improved year-over-year from 0 percent to 3.5 percent in the first quarter. In LG's handset business specifically, the operation's sales declined by 20 percent compared to the first quarter of 2009.
LG shipped 27.1 million handsets in the first quarter, down from the 33.9 million it shipped in the fourth quarter of 2009. North America accounted for 28 percent of LG's global handset shipments.
LG CFO David Jung said improving the company's mobile business around was a "top priority," according to Reuters. He said the company plans to introduce more competitive handsets, though LG will take "a bit more time" to really improve profitability.
Indeed, LG offered market watchers a glimpse of its smartphone ambitions with the introduction of its new Optimus Android phone. LG said the Optimus will be available in May starting in Europe "to be followed by other markets."
For more:
- see the FierceWireless Q1 earnings page
- see this LG earnings release
- see these charts from LG's first quarter
- see this LG Optimus release
- see this WSJ article (sub. req.)
- see this Reuters article
Related Articles:
Smartphone sales in focus for Q1
LG unleashes Android on home market
Nokia posts Q1 profit, dogged by smartphone concerns