LG has announced a press release detailing the company’s financial performance in the fourth quarter of 2016. In spite of record revenue from Home Appliances, Air Solutions, and Home Entertainment, as well as record Q4 operating profits, underperformance in Mobile Communications and Vehicle Components resulted in a net loss of just under $224 million.
>Major losses of $400 million in the mobile division hampered what would have otherwise been a quarterly net profit of $257 million.
LG lays most of the blame for mobile losses on weak sales of the G5, while the V20 reportedly sold reasonably well and contributed to 15% QoQ revenue increase for the division. LG’s strategy for mobile profitability lies mainly in releasing a successful flagship and “Mega hit” budget device, while also improving the performance, quality, and safety of the devices they develop.
With the LG G6 slated for a reveal in late February and launch soon after, the company will not have to wait much longer to see how their flagship fares. A highly competitive budget market, due largely to intense focus on quality improvement in companies like Xiaomi, will have LG also facing major competition in their pursuit of highly successful low-end device.
Heading into a new fiscal year, significant QoQ profit growth is expected in Q1 2017. Time will tell if LG can once again find financial success in the mobile realm, and 2017 will be an important year for the company to demonstrate its ability to learn from past mistakes.
Source: LG News Room
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