Earnings: LG Electronics Q3 profit down
LG Electronics reported a record quarterly loss for its mobile division. Sales from its mobile phone business were down 23 percent in the third quarter to KRW 2.52 trillion (USD 2.3 billion). Total smartphone shipments of LG fell 9 percent compared to the same time last year. "Lower sales of premium devices and expenses related to business structure improvement activities" resulted in a quarterly operating loss of KRW 436.4 billion in LG's mobile divsion.
South Korea's LG Electronics blamed very low sales for the LG G5 and price pressure in the smartphone market, resulting in a net loss of KRW 81.5 billion compared to a profit of KRW 124.8 billion a year ago. LG said it expects tough competition in key markets like smartphones and TVs to continue in the last quarter, while it also faces pressure from rising component prices and the weak macro-economic climate.
LG expects only a small sequential growth in Q4 revenue. Operating margins will be under pressure from seasonal promotions. LG Electronics expects to complete the restructuring of the mobile business by year-end and then focus fully on coming up with a better flagship model for next year. LG will focus on growing sales of its new V20 smartphone, as well as expanding in the mid tier smartphone market.