LG Electronics expects its mobile division to report a fifth consecutive operating loss for the second quarter of 2016, Reuters reported.
The South Korean vendor said its quarterly profit is likely to reach a two-year high due largely from its home appliances and set-top box businesses. But HMC Investment analyst Greg Roh estimated the mobile business suffered a loss of nearly $82 million, Reuters said, due largely to disappointing sales of its flagship G5 handset.
"Despite the G5's originality, LG sold only 2.2 million units of the strategic model due to stiff competition," Roh wrote in a research note, Reuters said. "We expect the (mobile division) to remain in the red in 3Q16."
LG unveiled the G5 during a high-profile media event in February at the Mobile World Congress show in Barcelona, Spain. The gadget offers a modular design that enables users to transform it with companion devices into a virtual reality headset, a 360-degree camera, a rolling home-security device and other options.
LG also offered a software development kit (SDK) and hardware development kit (HDK) to developers, enabling them to design and deploy apps for the G5.
LG reported a 12 percent decline in smartphone shipments and a 15.5 percent drop in mobile revenues during the first quarter of 2016. And the company has struggled to differentiate its flagship from other Android handsets at the top end of the market, particularly Samsung's Galaxy S7 and S7 Edge. Samsung said this week it expects to report roughly $7 billion in operating profit during the second quarter of 2016 thanks in large part to the success of its top-of-the-line models.
LG recently announced a major restructuring of the front office of its mobile business, and the G5 has received solid reviews praising both its specs and its modular features. But whether the company can regain its footing in a smartphone market where growth has slowed to a crawl is far from clear.
- see this Reuters report
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