LG would make more money if it wasn't for smartphones

LG's TV and appliance divisions make big profits and then watch mobile lose it all.

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Daniel Cooper
October 27th, 2016
In this article: 2016, Business, Financials, gear, lg, Loss, mobile, Profit, Q3, Q32016
LG would make more money if it wasn't for smartphones
You know it's bad when your mobile business gets trounced by the rival that sold a smartphone that actually blew up in its customers pockets. That's the situation over at LG, whose mobile communications division contrived to lose $389.4 million across the last three months. In the company's latest financials, it's revealed that LG shipped 13.5 million devices and saw US sales increase by 14 percent quarter-on-quarter. But that's pretty much the same thing the company achieved in every quarter since the start of 2014, and that plan stopped making a profit partway through 2015.

The cause of this mobile malaise isn't exactly a surprise with problems inside and outside LG contributing to the problems. First up, the LG G5 was a flop and the V20, which previewed very well, is going to cost $120 more than the comparable Google Pixel. Then there's the fact that the smartphone market ain't what it used to be, and upstart Chinese brands that don't need to worry about profit are undercutting everyone across the board. Earlier this year, we asked when LG's smartphone patience would run out, and on this evidence, it won't be long until some accountant asks what the value is in losing $300 - $400 million a quarter.

Ironically, while its mobile division flounders, the rest of LG's actually doing pretty well, selling $11.8 billion worth of gear and coining a healthy $252.7 million profit. But that cash comes from areas where LG's arguably much stronger, including home appliances, air conditioners and TVs. In fact, that latter division recorded a record profit, raking in $340.4 million to help offset those other losses. The firm's nascent vehicle components arm is also growing, although it's yet to turn a profit, but that's been attributed to R&D spending and investing for the future.

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