LG Electronics saw losses at its smartphone business worsen in the second quarter, as the global market weakened and the company suffered from tough competition in the premium and mid-range segments. Revenues at the mobile division declined 19 percent year-on-year to KRW 2.07 trillion, and the operating loss widened to KRW 185 billion from KRW 140 billion a year ago and KRW 136 billion in Q1.
LG said mobile results suffered from the stagnating market as well lower sales of low and mid-range smartphones in North and South America. The lower sales coupled with increased marketing expenses for its new premium devices led to further losses at the operating level.
With competition in the premium smartphone category expected to intensify as competitors launch new models in the coming months and growth to remain stagnant in the second half, the company said it will seek to further improve its business structure and increase sales of the new premium LG G7 ThinQ and LG V35 flagship smartphones in key markets around the world.
LG Electronics’ group results were in line with its preliminary report. Revenues rose 3.2 percent to KRW 15.02 trillion, as growth in home appliances and TVs offset the weak mobile performance. Operating profit increased 16 percent to KRW 771 billion, and the margin improved to 5.1 percent from 4.6 percent a year ago. Net profit dropped to KRW 326.5 billion from KRW 514.9 billion a year earlier when the company booked a large tax gain.
Due to uncertainties surrounding market conditions, competition and international trade, LG said it enters the second half “with an intense focus on cost competitiveness and profitable growth”. – Telecompaper