LG Electronics (SEO: 066570) appears to be weathering the slump in cellphone sales slightly better than two of its rivals, as sales of its mid-tiers phones like its touchscreen model the Cookie remain strong. The South Korean electronics giant and the world’s third largest handset maker reported that cellphone revenues rose 23 percent to 3.92 trillion won ($2.78 billion) year on year. Operating profit, however, was down 41 percent to 263 billion won ($193 billion) in Q1 compared to the same period a year ago, as operating margin fell to 6.7 percent from 13.9 percent a year earlier. Handsets shipments were down 7 percent to 22.6 million units, which LG blamed on the global economic downturn and on traditional post-holiday sales slowdown, or “seasonality.” By comparison, Nokia (NYSE: NOK), the world’s largest handset maker reported a 19 percent drop in shipments, while struggling Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) recorded a 35 percent fall in the same period.

Still, analysts were hopeful for LG’s future handset sales, which as Bloomberg reports, accounted for 75 percent of LG’s total operating income last year. LG predicted that the global handset market would decline by over 10 percent to 260 million units in Q2. It said, however, that it expected 10 percent growth from Q1 to Q2 as it focused on high-tier feature rich phones including the Arena, and its messaging phones Xenon, Neon, and its camera phone Viewty Smart.

Bloomberg reports that Nomura analyst James Kim believes LG’s shipments will increase 10 percent this year to 111 million units, and buck the 11 percent drop in industry sales.

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