LG sold more smartphones in Q2, but swung to a loss on marketing costs to fend off Chinese Androids
LG Electronics just reported its earnings for the aurter ending in June, and its mobile division, that is of dear interest to us, returned a small loss of about $50 million, after two profitable quarters. The conglomerate itself was in the green, with a net profit of about $304 million.
The Koreans said they sold 4% less phones than in Q1, 13.1 million, with 7% less revenue, but the amount of smartphones in the mix was 44%, and the revenue from them was higher, thanks to the increased sales of LTE handsets. The loss stemmed from the fact that LG decided to increase its marketing expenses (those booth models in the thumbnail don't come cheap), in order to battle the barrage of Android phones from companies like ZTE and Huawei.
Its high-margin hopes are also pinned to the quad-core LG Optimus 4X HD, whose general availability wasn't until recently, so its revenue impact will only start showing in Q3.