LG Posts Q1 Loss, Predicts Growth

LG, nevertheless, is predicting that its own sales will grow more than 10 percent quarter-to-quarter in the current three-month period as the vendor focuses on higher-tier products such as the Arena and its messaging phones, such as the Xenon and Neon models.

LG Electronics Tuesday reported a $141 million loss in its first quarter ended March 31, despite a nearly 15 percent increase in sales year-over-year to $9.12 billion compared to the same period a year ago.

The Seoul, Korea-based company blamed the loss on the global recession, but noted that handset profit margins and improvements in its flat-screen business helped its bottom line. LG said handset sales accounted for $2.78 billion of its revenue, up 22.6 percent year-over year.

The company attributed the handset revenue gains to popular midtier models, such as the vendor's Cookie and the LG-KS360. However, unit shipments of handsets fell 7 percent year-over-year and 12 percent quarter-over-quarter to 22.6 million units. LG blamed the declines on a seasonal effect and the global economic contraction.

Still, LG is targeting over 10 percent growth quarter-over-quarter by focusing on high-tier products such as Arena, and messaging phones Xenon and Neon.

"I see a better picture for the second quarter as mobile phones are set to grab more share, TV sales are in good shape on lower prices, and as home appliances enter a busy season," KTB Asset Management Co. analyst Lee Jin Woo told Reuters. "We're seeing some signs of improvement in consumer sentiment, which makes me a little bit more positive on the demand-side boost."

LG's Business Solutions company reported a sales decline of 6.6 percent year-over-year to $780 million. The company said the loss was due to a sales decline in monitors and other products. To improve sales, LG said it would focus on new B2B channels for such products as network monitors.