South Korean electronics giant LG just posted its earnings report for the first quarter of 2019. Although the company’s home appliance division saw record growth as compared to this time last year, its mobile division continues to lose the company huge amounts of money.
LG reported mobile division sales of 1.51 trillion South Korean won (~$1.34 billion) with a quarterly operating loss of 203.5 billion KRW (~$181.05 million). Although this represents a slight improvement as compared to the previous quarter (Q4 2018), the division is still bleeding cash and showing no growth.
Previously, LG’s other divisions have been able to prop up the loss-leading mobile sector, but now things are getting to the point where even that is not possible. At this point, LG’s overall business is sagging under the dead weight of its mobile division, which has been in the red now for nine straight quarters.
In LG’s press release for the news, the company specifically mentions the upcoming LG V50 ThinQ, which will be the first 5G device from the manufacturer and only one of a handful of 5G devices on the market. After the mediocre reviews for the LG G8 ThinQ, LG makes it clear that it has a lot riding on the V50.
The press release also highlights LG’s cost-cutting measure of moving mobile production from South Korea to its plant in Vietnam.
We’ll have to wait for the next quarterly results to see if these strategies pan out for LG. Hopefully, something works for the company soon, as it won’t be able to sustain losses like this for long.