LG posts first quarterly operating loss in 6 years in Q4 2016, mobile revenue down 21% YoY due to weak G5 sales


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LG Electronics has reported revenues of 1.34 trillion won (US$ 1.16 billion) in Q4 that ended December 31, 2016, which is up 12.2% compared to the same quarter last year, but it has reported operating loss of 35.2 billion won (US$30.1 million), compared to a profit of 348.9 billion won for the same quarter in 2015.

LG Home Appliance & Air Solutions Company and LG Home Entertainment Company posted their strongest operating profit ever in 2016. However, due to losses from mobile communications and vehicle components, LG reported a fourth-quarter net loss of 258.80 billion won (US$ 223.98 million).

Mobile Communications sector reported a quarterly revenue of 2.90 trillion won (US$ 2.51 billion), up 15% QoQ due to strong sales of V20, but it is down 20.98% YoY. The sector posted a operating loss of 467.0 billion won, compared to loss of KRW 60.9 billion a year ago.  This is mainly due to weak performance of premium products such as weak sales of G5 for the second consecutive quarter and higher marketing investments for V20, and expenses associated with finalizing the business structure improvement activities.

“Introductions of the next G Series phone and mass-tier devices in the second quarter following Mobile World Congress are expected to help greatly improve the LG Mobile Communications Company’s market position in 2017,” said the company.

LG said that it will create Mega hit model in mass-tier zone to proceed profitable growth, strengthen the basic performance, quality and safety of the product in order to enhance customer’s credibility and satisfaction.

The company shipped 14.1 million smartphones in the quarter, down 8% year-on-year and up 4% quarter-on-quarter. Mobile phone sales increased 15% QoQ in the North America Market. Mass tier sales were up 1% QoQ driven by K/X series.

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Author: Srivatsan Sridhar

Srivatsan Sridhar is a Mobile Technology Enthusiast who is passionate about Mobile phones and Mobile apps. He uses the phones he reviews as his main phone. You can follow him on Twitter and Instagram