​LG mobile division bleeds $136m amid record profits

LG Electronics' mobile division saw an operating loss of 153.5 billion won ($136 million), being the thorn in an otherwise successful second quarter.
Written by Cho Mu-Hyun, Contributing Writer

LG Electronics posted an operating profit of 584.6 billion won, a rise of 139.5 percent from a year ago, backed by strong sales of TVs and home appliances.

It beats its first quarter's 505.2 billion won and is its best in nine quarters.

Its mobile division, however, saw an operating loss of 153.5 billion won ($136 million), due to an increase in marketing costs and poor sales of its flagship G5 smartphone, the company said.

Its home appliance division as expected contributed hefty 433.7 billion won in profits, backed by successful cost cutting and the popularity of its premium brand LG Signature. It also successfully expanded in its B2B business.

Its TV business saw 356.7 billion in solid profits but saw demand in rising markets in Africa and the Middle East fall.

LG said it will continue to expand its Signature brand in the consumer end and built-in business for enterprise clients.

For the mobile business, it expected "intensifying competition" in the second half but will launch the next V series and expand the mid-tier K and X series, and improve its profit model.

LG made headlines by launching the G5 part modular, an interesting concept, but as ZDNet noted, sales did not back up the risk it took.

The South Korean tech giant commenced a restructuring that changed many leadership positions within the mobile division due to the setback.

LG said that due to early supply issues, it failed to translate the positive market reception for the smartphone into profits.

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