LG Electronics reported sales from its mobile phone business down 23 percent year-on-year in the third quarter to KRW 2.52 trillion (USD 2.3 billion). The company blamed the lower sales on a weak performance for top models like the G5 and price pressure in the smartphone market. Total smartphone shipments fell 9 percent year-on-year and were 3 percent lower versus Q2 at 13.5 million. The lower sales of premium devices and costs for restructuring led to a quarterly operating loss of KRW 436.4 billion in mobile.
The weak mobile results pulled group sales down 5.7 percent year-on-year to KRW 13.22 trillion, and operating profit fell 10.8 percent to KRW 283.2 billion, in line with LG's preliminary report. The net result was a loss of KRW 81.5 billion compared to a profit of KRW 124.8 billion a year ago.
LG said it expects tough competition in key markets like smartphones and TVs to continue in the last quarter, while it also faces pressure from rising component prices and the weak macro-economic climate. Overall it expects mid single-digit sequential growth in Q4 revenue, while operating margins will be under pressure from seasonal promotions.
The company expects to complete the restructuring of the mobile business by year-end and then focus fully on coming up with a better flagship model for next year. In Q4, it will focus on growing sales of its new V20 model, as well as expanding in the mid tier smartphone market.
