LG has seen its profit slump in the 2015 second quarter, reporting a decline in TV and smartphone shipments for the period, in what it has labelled an “extremely challenging environment”.LG’s net income of 226 billion won (around $267 million) was down 45 per cent year-on-year, with operating profit of 244 billion won down 60 per cent.
As reported by Reuters, LG’s operating profit came in well below a 395 billion won mean estimate from a Thomson Reuters I/B/E/S survey of 33 analysts.
LG stated that “in light of a sluggish global TV market and intense competitive pressures”, that its second quarter sales declined 7.6 per cent year-on-year to 13.93 trillion won.
“While the second quarter was more challenging than expected, LG is confident it can recover lost ground in the third quarter with new competitive products and more effective marketing initiatives,” LG stated upon release of the results.
LG’s global smartphone shipments of 14.1 million units represented a 3 per cent decline year-on-year, with LG’s mobile communications division posting operating income of 0.2 billion won, down from 86.7 billion won year-on-year.
Amid the fiercely competitive smartphone market, LG stated that in the third quarter and beyond, it “will more aggressively implement its dual strategy focusing on both premium devices as well as mid-range smartphones targeting emerging markets”.
LG’s home entertainment division posted an operating loss of 82.7 billion won, down from operating income of 158.6 billion won year-on-year.
LG, however, expects the overall market to improve in future quarters primarily in the premium 4K ultra-HD segment, stating that it will expand its OLED line with newer designs at more attractive price points.