LG

LG to sustain its first quarterly operating loss since 2010, mobile and appliance sales went below expectations

LG to sustain its first quarterly operating loss since 2010, mobile and appliance sales went below expectations
It seems LG won't have much in the way of financial wellbeing to talk about this month, as the company prepares to report its first quarterly operating loss in six years. Q4 2016 will see LG drop $29.36 million, which is attributed to prolonged difficulties with its mobile business and a seasonal weakening of appliances sales – the company's main profit engine. Heightened promotional expenses have also contributed to the situation. On the upside, revenue for the quarter may have improved 1.5%.

2016 wasn't a good year for LG's mobile business in particular, as its premium product, the LG G5, sold below expectations to the tune of high marketing spending. Sales of mid and low-range LG phones didn't cut it, either, and the LG V20, the company's second-half major release, is too new on the market to make a significant dent.

LG's next major smartphone offering will be the LG G6, which the company plans to introduce at the MWC conference in Barcelona this February. As the LG G5's innovative modular concept didn't catch on with consumers, the smartphone is designed with usability and aesthetics in mind. It's also said to be cheaper to manufacture than the LG G5, which will improve sales margins for the company and lead to better profits.

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15 Comments

1. keithtae

Posts: 564; Member since: Mar 25, 2015

Expected, bought an LG 10kg washer that cost my family a fortune and had to repair it so often even within warranty period. Switched to samsung washer and dryer and dont even have to repair once since then. Even changed my gaming monitor few years back, and never looked back.

2. shaineql

Posts: 522; Member since: Apr 28, 2014

Honestly, Samsung is only company next to apple that can possibly recover from disaster like Note 7 and maybe even turn it to their advantage. Imagine LG G5 exploding , LG would never recover,they are dying on their own anyway , same goes for every other company. This is why I will only buy Samsung phone.

6. Settings

Posts: 2943; Member since: Jul 02, 2014

How do you know LG wouldn't recover? And other every company? Let's take at Sony, PSP wasn't successful compare to the DS but Sony still stays. Vita failed but the 3DS didn't, Sony still stayed. Emailed leaks, the movie Interview failed. Sony still stayed. Spiderman rebooted twice, Sony still stayed. Even Homecoming will be great. You're only looking at the piece of whats really happening. Really? An exploding phone will lead an international company to crumbles?

12. JC557

Posts: 1919; Member since: Dec 07, 2011

Remember they make a ton of components for various oems on top of pushing out a lot more handsets in a variety of markets. Samsung also have their hands in practically everything in South Korea so a single mobile phone line being recalled doesn't hurt the company as a whole all that much.

3. domfonusr

Posts: 1084; Member since: Jan 17, 2014

Those who don't do as Apple does eventually suffer. LG made decent phones, even though they may not have been popular in recent months and years, but because they tried to do things differently they have ended up in this position. The only way to make it these days is to do as Apple does, even though Apple is dead set on not letting anybody else do as they do. The whole mobile phone industry is basically about to be broken in this fashion; near-lethal unpopularity for the different-doers, and near-lethal litigation for the copiers. LG is no exception...

13. JC557

Posts: 1919; Member since: Dec 07, 2011

Apple may be paying the price with their new MacBook Pro being a pretty large miss especially in the market it's geared towards. Same with the iPad Pro.

4. Trex95

Posts: 2381; Member since: Mar 03, 2013

LG should improve there quilaty to match Apple and Samsung.

5. ryq24

Posts: 875; Member since: Oct 17, 2011

The rise of Huawei hurt them a lot too.

7. combatmedic870

Posts: 984; Member since: Sep 02, 2015

If they would have released the LG v34 in the US as the G5 I think it would have been 2-3 times more successful. It's basically the upgraded G2 so many of us long for, myself included.

8. yalokiy

Posts: 987; Member since: Aug 01, 2016

Looks like LG management decisions to include replaceable batteries instead of bigger batteries were wrong.

9. ajit1

Posts: 9; Member since: Aug 24, 2016

I think the only reason behind LG's unsuccess in mobile division is their strategies of advertisements of product...specially the tv commercials............

10. ebilcake

Posts: 1228; Member since: Jul 16, 2016

LG have good intentions when it come to features but the end product just isnt good enough and the quality control is horrible. Networks were practically giving away the LG G5 before Christmas here, anyone whose used them knows the build quality is suspect and they feel cheap. Visible antenna line on the back which is meant to be covered up seamlessly, it's not. also chipped metallic paint on the edges, also an uneven paint job on the back in small bumps and indentations, stuff like this will hurt you long term as users won't buy or recommend LG again.

11. sissy246

Posts: 7106; Member since: Mar 04, 2015

The LG G5 was a bust. It was ugly, on some the seams didn't line up on the removable battery. In my opinion there is no reason why LG is not making better phone's. Talk about bad QC.

14. Noahguy

Posts: 2; Member since: Jan 08, 2017

I have an LG mid ranger phone and a smart TV(older model) from them. For me these products are great and work fine. I think it's a shame that their underselling

15. jroc74

Posts: 6023; Member since: Dec 30, 2010

Love their air conditioners, hate their phones.

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