LG’s mobile business is in a sticky patch after the company admitted its flagship LG G6 smartphone hasn’t sold as well as expected.
LG Electronics itself posted a business-wide operating income of KRW 664.1 billion (USD 588.2 million) on overall revenue KRW 14.55 trillion (USD 12.89 billion). While LG’s operating income rose by 14 percent year-on-year to outpace a four percent annual growth in revenue, its overall numbers were curtailed by a mobile business that posted a KRW 132.4 billion ($117.27 million) loss for the quarter.
The “challenging” quarter was down to “weaker than expected premium smartphone sales and increase in component costs,” LG said. In the previous quarter, Q1 2017, LG’s smartphone shipments jumped over 10 percent to 14.8 million with the G6, which ditched the experimental modular approach of its predecessor, among its top performers. The company didn’t disclose sales for Q2.
The company’s phone business actually performed better this quarter than the same period in 2016, when it recorded a wider loss of KRW 153.5 billion (USD 132.10 million), even though its revenue fell by 19 percent year-on-year. But against the backdrop of three of the Korean company’s primary business units reporting increased revenue levels, its phone business is again the laggard.
Some positive news can be found in North America, where LG said sales were up 13 percent year-on-year thanks to the popularity of its more affordable phones. LG believes its upcoming Q Series, another mid-range effort, can help revive its mobile business in the second half of this year.