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Despite the LG G5, LG still made money last quarter

Despite unremarkable sales of the LG G5, LG Electronics' other business units still managed to lead the company to a meager Q2, 2016 profit.

Published onJuly 28, 2016

galaxy s7 vs htc 10 vs lg g5 aa (4 of 10)

No surprises here: the LG G5 hasn’t sold so well. Its funky modular design failed to capture the attention of the masses, build quality and material issues created mini-scandals and it had some rock solid competition in the S7 range. So it shouldn’t shock you to know that the G5 is being scapegoated as the reason why LG Mobile posted a Q2 earnings loss of 150 billion Korean Won (~$132 million).

Problems with the LG G5 and how to fix them

It isn’t all doom and gloom though: that loss is actually only 75% of what LG lost last quarter. Revenue actually increased from Q1, 2016, but that’s to be expected when a new flagship launches. Total smartphone sales tallied 13.9 million units, a decrease of only 1% year-on-year. Company-wide, however, LG Electronics managed to make a meager 0.6% increase in profits over this period last year. But once again, LG Mobile was a drain on wider company profits.

Total smartphone sales tallied 13.9 million units, a decrease of only 1% year-on-year.

For comparison’s sake, compared to last year and the launch of the LG G4, sales in the mobile division were down 6% (which admittedly isn’t anywhere as bad as it could have been). Fortunately though, the K and X series sold reasonably well. Most notably, mobile phone sales in South Korea increased by 57% for the quarter at the same time as they declined 9% in North America.

The outlook for LG Mobile in the next quarter also doesn’t look too good, even while Galaxy S7 sales continue to drive solid profits for Samsung. The upcoming LG V20 – along with more K and X series sales – are expected to make up for the G5’s failings. Considering the popularity of the LG V10, unless LG makes a serious misstep with its successor, they should have a decent final quarter in the pipeline.

What do you want to see from the LG V20? Do you think LG should abandon modularity?

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