LG's Q2 profits lower than expected, struggling mobile division to blame
by Plamen Dimitrov / Jul 07, 2017, 7:47 AM
LG Electronics has announced its operating profit estimates for the second quarter of 2017. Judging by the reported preliminary April-June profit of 664 billion won ($574.49 million), it is estimated that the tech giant will record a year-over-year increase of about 14%.
While this growth is by no means meager, the financial results actually fall beneath the expectations of several market analysts, who forecasted that the South Korean company would post a net income of about 755 billion won or $654 million.
Moreover, it appears that the main reason for LG's stunted profits is the firm's mobile division. Dongbu Securities analyst S.R. Kwon has commented on the situation:
If this information is accurate, this would mean that LG's mobile business is operating at a loss for the 9th straight quarter, which could be attributed to the increased marketing spending for its latest flagship, the LG G6, as well as subdued sales figures for its other smartphone models.
Still, this doesn't mean that the G6 isn't a successful product for LG's mobile division, especially when compared to last year's modular G5. However, it looks like the company needs to find a way to spread this popularity to some of its other models in order to become self-sustainable.
Meanwhile, LG's "local" rival Samsung could very well record its most profitable quarter ever, with some speculating that Sammie might even earn more than Apple in Q2 2017.
Posts: 303; Member since: Nov 06, 2013
Life ain't that good for LG. Meanwhile the better Korean brand is about to have a bigger quarter than Apple.
posted on Jul 07, 2017, 7:56 AM 7
Posts: 7391; Member since: Feb 17, 2016
Lol, Apple made 11 BILLION dollars last quarter. That's more than Google and Facebook COMBINED. Samsung fans say the most delusional s**t sometimes.
posted on Jul 07, 2017, 8:02 AM 2
Posts: 713; Member since: Sep 19, 2014
I think it includes other businesses.
posted on Jul 07, 2017, 8:21 AM 9
Posts: 303; Member since: Nov 06, 2013
It's interesting how you suddenly mentioned "Samsung mobile" after you realized you had been exposed. Either way who cares if Samsung has more businesses than Apple ? It's clearly working and they're about to break records.
posted on Jul 07, 2017, 8:53 AM 5
Records and such don't matter. The fact is that Samsung is about to become the most profitable tech company in the world, a position previously held by Apple. No ifs, ands, or buts. That amount of profit translates into Google, Facebook, Amazon and Netflix combined.
posted on Jul 07, 2017, 5:32 PM 0
Posts: 1088; Member since: Feb 24, 2014
I'd attribute their 9 quarter misfortune to "too little and too much, too late". The G6 is the G2's righteous successor by not screwing up or jumping too far ahead in design aspects that mattered to people. Plus they should have streamlined their device portfolio.
posted on Jul 07, 2017, 2:12 PM 0
Posts: 160; Member since: Jun 16, 2017
I think brand popularity and lack of serious advertising I sweat costs them today, the G3 and especially the G4 were both solid and great phones, if they put in more money into their ad like Samy, I think they'll make more profit. In my country most people don't even know LG makes smartphones but ask the same people about Samsung and they'll just drool over you.
posted on Jul 08, 2017, 2:03 AM 0
Posts: 549; Member since: Jun 19, 2011
i will only get worse if the launch the G6+ with the same SD 821
posted on Jul 07, 2017, 9:05 AM 1
Posts: 251; Member since: Feb 12, 2011
lg have to wake up , they should not expect that selling a 2016 phone ( specs wise , processor , 32 gb rom ) they will have a good quarter , people are getting more exigents with phone specs. put an 835 processor and make the rom larger 64 or even 128 and you will see , they tried to save money with the specs , then they end up " saving " clients .
posted on Jul 07, 2017, 2:21 PM 0
Posts: 1197; Member since: Sep 01, 2015
They should have waited for the SD835, and they should have released one version, and not a restricted one for Europe (no wireless charging, no 64GB and no quad DAC).
posted on Jul 07, 2017, 4:40 PM 0
Posts: 229; Member since: Feb 11, 2017
Hindsight is 20/20, but I agree with everything you said. They weighed the updated processor vs. the earlier release and made what they thought was the better decision, and then proceeded to shoot themselves in the foot (with the 32 GB memory in most places, no Quad DAC except in limited markets, wireless charging in North America only, etc). The problem is, I doubt it would have mattered if they had waited and released a phone with the 835 chip and avoided all the other mistakes. They would have then faced greater competition with the later release. Every LG phone is a "almost...." There is always something. The G6 was close. Maybe the V30 will be what the G6 could have been.
posted on Jul 07, 2017, 6:30 PM 0
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