LG financials

LG cited “an extremely challenging environment” for premium smartphones as the reason for posting a net operating profit of just 200M won ($172k) for its mobile division – a number put into stark perspective by Engadget as a profit of just 1.2 cents per phone. LG specifically singled out competition from the iPhone as a factor.

While year-on-year smartphone shipments were down 3%, it did achieve a tiny 1% increase in revenue, but said that profitability was hit by weaker demand in the premium sector in its home market of Korea. There was better news in the U.S. and Canada, however … 
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LG’s twin-track smartphone strategy – offering both premium G-series models and cheaper L-series devices – appears to be working, with the company announcing Q3 smartphone sales up by 39% to 16.8M and operating profits more than doubled to 461B won ($440M). The results beat analyst expectations, and LG said that it was bullish about future prospects.

Building on its momentum and two consecutive profitable quarters, LG expects to strengthen its positioning in the smartphone market with its G Series and L Series models despite the landscape becoming more competitive

The G3 handset in particular has helped the company gain ground against its much larger Korean rival Samsung. Samsung is due to announce its own Q3 results tomorrow, but has already issued a profit warning on the basis of low average selling prices of its phones … 
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