LG Q1 2021 earnings: soon-to-be-dead mobile unit deeper in the red
LG has disclosed its first-quarter financial results and to the surprise of nobody, its smartphone business remained in the red in the first three months of 2021.
Overall, the South Korean company did well, with revenue growth of 27.7 percent from the last quarter to KRW 18.81 trillion ($16.90 billion) - a first-quarter record. Profit climbed 39.1 percent to KRW 1.52 trillion ($1.36 billion) on strong demand for home appliances and home entertainment products.
LG mobile's 24th consecutive loss-making quarter
LG is going to halt smartphone production and sales by July 31. The company hasn't been able to turn a profit for a long time, and the first quarter of 2021 was the smartphone wing's 24th straight loss-making three months.
The mobile unit reported sales of KRW 998.70 billion ($897.18 million) in the first quarter and an operating loss of KRW 280.10 billion ($251.63 million). Last quarter, these figures stood at KRW 1.39 trillion and KRW 248.5 billion.
Year on year profit declined 28 percent, and LG explains that it was because of a lack of new smartphone announcements. The company was previously expected to release a rollable phone this year, which would have been the second in the Explorer Project series. An LG Velvet-like device was reportedly also in the works.
The company has committed to providing software support to existing devices for three years. It has also revealed the name of the smartphones that will be eligible for upgrade to Android 12 and Android 13.
LG was once the world’s third-largest smartphone maker by shipments but it has been on a downward spiral for six years. As of Q4 2020, it was still the third-largest smartphone maker in the US after Apple and Samsung.
The company will now prioritize growth areas including electric-vehicle components, smart homes, and artificial intelligence. It will continue to work on some smartphone technologies such as cameras and sixth-generation networking.
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