Tuesday, October 10, 2017

LG’s Preliminary Q3 2017 Financial Report Shows its Mobile Division is Still Losing Money

Similar to HTC and Sony, LG's mobile division has been struggling to make a profit over the last few years. They've been able to supplement their cost with contracts from Google for previous Nexus devices and the upcoming Pixel 2 XL, but none of that has allowed them to post a profit in a while. Still, they don't seem to be backing down as they're still investing in mobile technology despite their losses. The company has just announced their 3rd quarter financial results for 2017 and its mobile division is still unable to produce a profit.

So while this hasn't led LG to kill its mobile division entirely, the company has been working to restructure some things internally. For instance, they recently appointed the head of their appliance division as the new CEO of the entire company.  This is interesting since its their appliance division that seems to be keeping the company afloat in the first place. They're betting with his leadership they can turn their flailing mobile business around.

So far it doesn't seem to have helped, but they are improving revenue compared to last year during this same time period. The company hasn't revealed exact details as to how much their mobile division cost them this quarter, analysts predict it to be about $174 million. Which, on the face of things sounds bad but they were actually able to increase their operating profit by 82% compared to Q3 of 2016 (to around $454 million).

This is from a revenue increase of only 15.2% as well, so the company is obviously going through a belt-tightening phase at this time. LG recently released the LG V30 in their home country of South Korea and is currently in the middle of a global launch at this time. So while those sales won't have an impact on this financial report, we should see how it impacted the company with their Q1 2018 results.


Source: Financial Times



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