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LG, Samsung report earnings, phone businesses not in perfect health

Chris Ziegler

South Korean archrivals Samsung and LG have both come clean with their second-quarter earnings this week. While there's still black ink across the board, LG suffered a 33 percent decline in net profit year-over-year, undoubtedly due in large part to a little bit of bleeding going on in the giant mobile division where they've posted a year-over-year loss "due to investment in R&D and expansion of channels in emerging markets for future development." Samsung, meanwhile, saw a 7.2 percent profit margin in its mobile business and a respectable 22 percent year-over-year improvement in shipments, but it came at the cost of higher price pressures -- margins are razor-thin for these guys, and they seem to be getting even smaller. The company ends on a positive note by saying that the Galaxy S series and the Wave should help push it through the third quarter, but considering how these guys flood the low end (read: the part of the market where it's especially difficult to make a buck) with dozens of devices every year, it seems like it's going to take superhuman efficiency to keep shareholders smiling.

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