LG surpasses forecast for handset shipments: Strength in U.S., emerging markets cited

LG Electronics Co. Ltd. shipped 24.4 million handsets in the first quarter, above analysts’ estimates of 23 million to 24 million units.
Handset sales reached $3.2 billion, up nearly 36% over the year-ago quarter, while the division’s operating profit reached $448 million, a four-fold jump from the year-ago quarter.
Handsets are one of four main businesses run by the Korean electronics maker.
The company attributed its surge to strong sales of its high-tier, W-CDMA handsets in the United States and its home market of Korea. The company specifically cited strong sales of its Viewty, Voyager and Venus models. Verizon Wireless sells both the Voyager and Venus in the United States.
LG’s unit shipments to emerging markets also increased, including India and China. European sales were weak.
The latter point suggests “softness in Europe, a negative for Nokia (Corp.),” said analyst Ittai Kidron at Oppenheimer, in a note to investors.
Nokia reports first-quarter earnings tomorrow and has not deviated from its bullish forecast — 10% year-on-year, industry-wide growth — for the global handset market. But analysts will be looking for any signs that the sluggish U.S. economy has eroded consumer spending in Europe, where many handset makers count on healthy margins with high-end handsets.
LG’s stock, traded on the Korean exchange, has risen in value 33% since the beginning of the year, according to Bloomberg.com., which suggested that LG’s momentum could propel it to fourth place in global rankings, ahead of Sony Ericsson Mobile Communications, which reports its earnings April 23.
LG forecast that the second quarter would see 4% overall industry growth to 290 million units. LG will launch the third edition of its Black Label series and said it would continue to focus on touchscreen technology, Internet browsing and multimedia functionality.
LG’s total sales for all its businesses rose 20% over the year-ago quarter. Operating profit rose 12% for the same period. The company said handsets and flat screen TVs led the charge.