Multimedia phones boost LG's earnings

LG Electronics Inc, the best performing stock among the world's major mobilephone makers, reported its second-highest profit in almost four years, driven by sales of its touch-screen Viewty and Voyager handsets.

First-quarter net income was 422.2 billion won ($427 million) during the first quarter, compared with a 122.6 billion won loss a year earlier, Seoul-based LG said in a statement yesterday. Profit missed the median analyst estimate in a Bloomberg survey after LG booked 236 billion won in currency-related losses.

Operating profit beat estimates and mobilephone shipments jumped 54 percent to a record, indicating LG may have passed Sony Ericsson Mobile Communications Ltd as the fourth-largest vendor. Its lineup of touch-screen and multimedia models will probably help the Korean company overtake Motorola Inc as the industry's third-largest producer this year, according to Merrill Lynch & Co.

"The figures look very good," said Choi Min Jai, who owns LG shares amid the $3 billion he oversees at KTB Asset Management Co in Seoul. "The company's making good products that sell well, and some stumbling on the part of Motorola and Sony Ericsson also helps."

LG shares closed 0.4 percent lower at 132,500 won on the Korea Exchange, paring a 3 percent drop earlier. The stock has risen 33 percent this year, the best performer among the world's five-largest mobile phone makers.

Earnings from mobile phones quadrupled to 444 billion won. Sales rose 36 percent to 3.2 trillion won.

Analysts at Citigroup Inc, Morgan Stanley and at least seven other brokers have raised their price targets on LG's stock in the past month, citing gains in the mobilephone business.

LG is the first major listed mobile-phone maker to report earnings for the latest quarter. Nokia Oyj, Samsung Electronics Co and Motorola Inc are scheduled to disclose earnings in April.

The Korean company said it sold 24.4 million phones during the quarter, exceeding the 22 million that Sony Ericsson projected it would sell. The venture between Sony Corp and Ericsson AB said on March 19 that first-quarter earnings and revenue would fall because of slower handset sales.

Profit from home appliances fell 15 percent to 144 billion.

The display division turned profitable for the first time in six quarters, led by flat-panel television sales. Profit at the business was 1 billion won.

Contributions from the company's liquid-crystal display unit, LG Display Co, helped boost profit.