Over the past couple of years, LG Electronics' operating profits have slowed, but earlier today the South Korean company revealed its expectations for the second quarter of the year, and thankfully it seems that the tech giant could record a two-year high in operating profits. However, despite the fact that LG was expecting the LG G5 flagship to boost sales figures in Q2 2016, it appears that the positive outcome is largely attributed to market niches other than LG's mobile division.
The LG G5 is, without a shadow of a doubt, a fairly unique smartphone, all thanks to its modular design which gives users the ability to attach different modules for a variety of purposes. In theory, this sounds like a great concept, but in reality, the LG G5 hasn't made much of an impact on the high-end smartphone market. According to HMC Investment analyst Greg Roh, the company managed to sell only 2.2 million LG G5 units during Q2 2016 "due to stiff competition". In light of these details, analysts believe that LG's mobile division is likely to have recorded a fifth consecutive operating loss throughout the second quarter of the year ending June. Furthermore, analyst Greg Roh expects the company's mobile division "to remain in the red" in the third quarter of the year.
Thankfully, while LG Electronics' mobile business doesn't seem to be doing too well, the company expects to reach a two-year high in operating profits throughout Q2, and revealed in a regulatory filing that its profits throughout April-June are likely to reach 585 billion Won (roughly $504 million). This would represent the highest quarterly profit registered by LG Electronics since Q2 2014, when the company topped 610 billion Won. This apparent success is largely attributed to LG's TV business. LG is the world's second-largest TV manufacturer following Samsung Electronics, and analysts believe that sporting events including the 2016 UEFA Champions League could have contributed to an increased demand (and sales) for both large-sized TV sets and more affordable alternatives. Additionally, LG's home appliances business is likely to have registered notable profits, according to analysts, who believe that the warm weather in certain regions may have increased demand for air conditioners. Either way, LG Electronics expects revenue for Q2 2016 to have increased by 0.5% to 14 trillion Won.