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LG Electronics reports 45 percent plunge

by on29 July 2015


LG Electronics has confirmed that it had a rubbish second quarter.

The company announced that earnings sank 45 percent over a year earlier as losses widened in its TV business and smartphone sales dried up. 

The company reported a net profit of $195 million for the April-June quarter, compared with double that last year.

A FactSet survey of analysts forecast thought the results would be worse than that but not by much.

Sales fell 8 percent and operating income declined 60 percent.

Most of LG's income came from the home appliance business that makes refrigerators, air conditioners and washing machines.

LG's TV business, the world's second-largest, reported a second straight quarterly loss as weak currencies in Europe and Russia hurt demand for TVs and profitability.

LG's mobile business produced a tiny profit as it spent heavily to promote the G4 flagship smartphone. The company had growth in North America for smartphones and tablets. But revenue dropped in South Korea, which is traditionally a major source of high-end phone sales for LG.

Overall, LG sold 14.1 million phones during the three month period, slightly lower than a year earlier, but produced just 200 million won of operating income, or less than $200,000.

The company plans to unveil a new flagship smartphone in autumn, a departure from its usual practice of releasing just one flagship phone a year.

LG is continuing its lone bet on OLED believing that consumers pay a more for TVs that can display sharper and more saturated colour than LCD technology. It has been wrong so far.

Everyone else in the industry is focused on 4K, or Ultra HD, and OLED TVs are too pricey.

Last modified on 29 July 2015
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