Recovering handset maker LG Electronics announced a fourth-quarter and full-year profit for its handset unit, as it shifted its product mix toward smartphones.

The company noted it improved its profitability due to increased sales and better cost structure, despite higher marketing and R&D expenses.

LG’s  handset unit saw Q4 operating profit of KRW55 billion ($50.66 million), compared with a prior-year loss of KRW3 billion, on revenue of KRW2.78 trillion, up 3.1 percent from KRW2.7 billion.

For the full year, the handset unit saw a profit of KRW51 billion, compared with a prior-year operating loss of KRW280 billion, on revenue of KRW9.9 trillion, down 13.1 percent from KRW11.4 trillion.

In terms of operating profit, the company has had a mixed year – two quarters in the black, and two in the red, with the full-year profit being the result of a strong Q4.

However, that still compares well to 2011, where the handset unit did not have a single quarterly profit.

LG said that quarterly handset shipments increased by 7 percent on Q3 levels, to 15.4 million.

Interestingly, as companies including HTC and Samsung provide fewer and fewer details of their performance, LG also revealed that 56 percent of its shipments (8.6 million) are smartphones.

In the prior sequential quarter, the split was closer to 50/50.

The company noted strong performances for devices including its Optimus G and Vu2 LTE smartphones, “robust” sales of its L-series 3G devices, and the launch of the Nexus 4 during the period.

Looking forward, it said that it expects the LTE market to grow, with service launches in Europe and emerging markets, although this will be accompanied by increased competition as rivals look to grow their market shares.

It also said it intends to “enhance” its cost competitiveness, and launch successors to the Optimus G and L-Series devices. Also in the roadmap are “mass LTE smartphones” in the F-series line.

On a group level, the company reported a net loss of KRW468 billion for the fourth quarter, compared with a Q4 2011 net loss of KRW112 billion, on revenue of KRW13.5 trillion, down slightly from KRW13.81 trillion.

It said that the loss “reflects a fine related to alleged cathode-ray tube pricing issues imposed by the European Commission in December”.