LG loses on smartphones, wins big on home appliances and TVs in Q1 2016
Samsung and LG managed to sync up their latest quarterly financial reports, probably unintentionally, and both Korean tech giants have reason to be proud of how much money they earned overall between January and March.
Strictly from a mobile point of view however, Q1 2016 wasn’t a rosy period for the nation’s eternal number two, which saw its division sales and operating income take big hits on lack of innovation, noteworthy new releases and high G5 marketing expenses.
The LG G5, mind you, only launched commercially on April 1, so it’s not technically to blame for its maker’s sub-par $2.6 billion mobile communications sales, and painful $180 million earnings loss. In fact, the modular phone racked up 1.6 million unit shipments in the less than a month on store shelves thus far on its way to a predicted 3 mil+ for Q2, which should help LG break even through June in its least profitable department.
Speaking of profits, the company’s consolidated operating income in the year’s first quarter exceeded $440 million, perfectly in line with expectations, setting a new two-year record. But if handhelds underperformed yet again, what was LG’s saving grace this quarter?
The answer is simple – the home appliance & air solution unit, and the home entertainment branch, both of which posted healthy gains of $360 million and $290M respectively, with the former even pulling off massive year-on-year and quarter-on-quarter sales increases. Now it remains to be seen just how long LG can afford to rely on refrigerators and TVs to offset larger and larger smartphone losses.
Will the G5 finally turn things around in Q2, perhaps doubled by the budget-friendly K series?