LG predicts shrinking overall Q2 profits, high G6 marketing costs likely to cause massive division loss
Those who refuse to believe the objectively impressive LG G6 is a sales dud are not going to like the Korean company’s latest earnings guidance, released on the same day that arch-rival Samsung forecasted record-breaking quarterly profits.
Overall, LG Electronics made some money between April and June 2017 as well, but we’re talking peanuts compared to the mind-blowing $12.1 billion bottom line of the Galaxy S8’s architects.
Namely, a modest 664 billion won, equating to roughly $577 million (with an “m”), up 14 percent year-on-year, but down almost 30 percent from the KRW 921.5 billion gained in the January – March 2017 timeframe.
The main culprit? As always, a flagging mobile division, which was incredibly close to yielding a profit in Q1 2017, once again falling in a deep hole of “subdued sales and increased marketing costs” this latest quarter.
Analysts say LG smartphones may have lost “well over 100 billion won” during the G6’s first few months of global availability, which converts to $87 million… or more. That’s not all the “Full Vision” flagship’s fault, of course, but the ambitious, non-modular handset is definitely not shaping up as the savior its OEM expected after last year’s G5 flop.
Will the V30 turn things around? Should LG just give up, and focus on significantly more lucrative home appliances, TVs and OLED panels for other smartphone manufacturers? Let us know what you think down below.