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LG back in black after six-month cash bleed

Business picks up in tellies and mobes

Top three mobile application threats

After two quarters of losses, LG Electronics has pulled itself out of the doldrums with a net profit of ₩243bn ($213m, £131m) in the first quarter of this year.

The Korean electronics firm lost ₩16bn ($14m, £8.6m) in the same quarter last year and ₩112bn ($98m, £60.6m) in the fourth quarter of 2011.

Appetite for its new Cinema Screen 3D Smart TV at home helped its telly business improve, with an almost doubled operating profit from the previous quarter – despite the fact that sales were down a little because of reduced demand in Europe.

LG is also doing well again in mobiles, with that business seeing an operating profit of ₩39bn ($34m, £21m), up from a loss of ₩101bn ($88.5m, £54m) in the same quarter last year. However, again, sales were down from the previous year, although LG claimed that was down to feature phones, while smarphones were up.

Both strategies show a refocusing on the high end of the markets – 3D TVs and smartphones – in order to try to recoup LG's lost ground in the telly and mobile sectors.

As a Korean company, LG is also benefiting from the strong yen, which means its exports to Japan are pummelling Japanese rival product-makers as well as creating space in the market for its products.

The company is expecting demand for LCD TVs to pick up in the next quarter, with the London Olympics forecast to "stimulate overall demand growth both quarter-on-quarter and year-on-year".

LG also expects good things in the mobile market.

"Although total demand for handsets is not expected to grow fast, continuous growth for the smartphone market is expected, especially for LTE phones in the developed countries with the European market planning to commercialise LTE," the firm said.

However, the firm also warned that the economic recession would remain a negative aspect for the electronics market. ®

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