* Q2 op profit 606 bln won vs 524 bln won analyst view
* Mobile division turns profit for first time since Q2 2013
* Shares close up more than 4 pct in flat market
(Adds comments from executives, analyst, smartphone context)
By Se Young Lee
SEOUL, July 24 LG Electronics Inc
signalled further improvement in its mobile business after
record smartphone sales propelled the South Korean manufacturer
to its highest quarterly profit in more than three years.
Chief Financial Officer Jung Do-hyun on Thursday said mobile
income should improve again in the current quarter with the help
of LG's flagship G3 smartphone, which has been well-received by
critics since its late-May launch.
"We don't expect (mobile) profit to turn negative like last
year," Jung said at an analyst conference after the company
reported second-quarter earnings. "We expect further
LG said operating profit rose 26.5 percent to 606 billion
won ($589.04 million) in April-June, versus a 524 billion won
mean estimate of 39 analysts polled by Thomson Reuters I/B/E/S.
That marked LG's highest operating profit since at least
2011, the earliest date for which restated earnings are
LG attributed part of the gain to a pickup in profit at its
mainstay television set business, brought about in part by
increased demand for ultra high-definition TVs.
The company also said it shipped a record 14.5 million
smartphones in the second quarter, when North American sales
grew 39 percent from the previous three months. That carried the
mobile business to its first quarterly profit in a year.
"A key factor to watch is how well the G3 smartphone fares
in the United States, but the outlook appears to be bright given
the second-quarter numbers," said HMC Investment analyst Greg
Shares of LG closed 4.2 percent higher after the earnings
announcement, versus a 0.1 percent decline in the broader market
. The stock has risen 13 percent this year, compared with
0.8 percent in the benchmark.
LG should see high single-digit annual revenue growth as
well as an operating profit increase in the July-September
period, Jung said.
For third-quarter profit, the mean estimate of 39 analysts
in a Thomson Reuters I/B/E/S poll is 404 billion won, nearly
double the year prior.
"LG's profit will likely ease in the second half from
January-June due to seasonally weaker air conditioner sales, but
profit will continue to grow on an on-year basis and that's
what's more important," said CIMB analyst Lee Do-hoon.
Helping third-quarter profit will be sales of smartphones,
particularly the G3 which was released in the United States and
Europe earlier this month.
Equipped with a high-resolution 5.5-inch screen and features
including a laser focus for the camera, the G3 has been widely
praised as a major upgrade to its predecessor G2. It will be
launched in China, the world's biggest phone market, in August.
"Reception for the G3 in North America has been very
positive, even better than we had expected," LG Vice President
Yoon Bu-hyun said at the conference on Thursday.
To be sure, LG still faces an uphill battle in the
smartphone market, in which its second-quarter shipments paled
in comparison with the 35.2 million handsets of Apple Inc
The company said there would likely be greater competition
in the second half of the year, with new products such as a
large-screen successor to Apple's iPhone 5 series and continued
price competition from Chinese manufacturers such as Xiaomi.
(Additional reporting by Narae Kim and Kahyun Yang; Editing by