Slow G5 sales, high marketing expenditures take toll on LG’s Q2 mobile results
When LG’s aptly named mobile communications division posted a troublesome albeit far from massive $180 million operating loss at the end of the year’s first quarter, the G5 couldn’t really be blamed, launching commercially on April 1, i.e. at the very beginning of Q2.
But after the early enthusiasm regarding the modular angle of the new flagship phone rapidly died down, it became crystal clear this lacked that certain je ne sais quoi to give the wildly successful Galaxy S7 a run for its money.
And now, LG has confirmed “initial sales” to be “somewhat slow”, which feels like a bit of an understatement, contributing to yet another segment loss of KRW 153.5 billion (USD 132.10 million) in the April – June timeframe.
Smartphone revenues even declined year-over-year while surging sequentially by a tiny 12 percent to less than $3 billion. A total of 13.9 million units were shipped in Q2, up 3 percent from Q1, and “increased marketing expenditures” are also to blame for the paltry performance. Looking ahead however, LG expects a mysterious V10 sequel and “expanding sales” of mid-range K and X models to improve the business department’s results as soon as Q3.
At the end of the day, just like last quarter, the Korean tech giant offset its mobile misfortunes with big home appliance and home entertainment gains. Record-breaking, even, bringing total consolidated revenues to a cool $12 billion and netting an operating income of roughly half a billion US dollars.
Source: LG Newsroom