South Korean electronics Major, LG Electronics reported solid 1Q13 results and raised 2013 smartphone guidance to 45m (from 35m at the beginning of the year) are positive signals supporting our thesis that LGE’s smartphone business is on the rebound.
LGE reported 10.3m smartphone shipment, slightly ahead of our 9.8m forecast, and confirmed that inventory remains lean. For 2Q13, we infer management is looking for ~20% qoq shipment growth (to 12m+), with handset OP potentially flat to up.
We expect LGE to generate shipment growth in 2Q, mostly through mass tier 3G (L-series) and LTE (F-series) smartphones, sidestepping direct competition with Samsung’s Galaxy S4. LG Management has indicated a solid pipeline of products through 2H13, with an anticipated Optimus G2 in 3Q followed by a product with flexible substrate in 4Q.