As the month of July is about to end, companies and corporations have begun to post their earnings for the second quarter of 2016 which runs through the April – June period. LG Electronics is no different and has recently posted its earnings. The South Korean firm expected operating profits for the second quarter to reach a two-year high and the company's analysts were pretty much on the money.
LG has announced that it managed to bring in 584.6 billion won ($519.6 million) in operating profits compared to 244 billion won ($216.5 million) it earned during Q2 2015. This represents a huge 140 percent increase in profits and was mainly due to substantial growth in the Home Entertainment and Home Appliance & Air Solution sectors. LG also reported revenues for the second quarter of 2016 to be at 14 trillion won ($12.05 billion), a 0.6 percent increase from the same period the previous year. On the other hand, LG's mobile unit recorded an operating loss of 53.5 billion won ($132.1 million). This is an improvement from Q1 2016 as its mobile unit reported a loss of $170.0 million then. As for revenue, the mobile unit managed to net a 12 percent increase from the previous quarter to 3.3 trillion won ($2.86 billion) thanks to the company's latest flagship smartphone, the LG G5.
However, the modular G5 didn't have the impact the firm was hoping for as it only managed to ship 13.9 million phones in the quarter, down 1 percent year-on-year but up 3 percent quarter-on-quarter. It is a modest increase from the 13.5 million units shipped last quarter. Sale of the company's devices in South Korea increased by 57 percent, but it declined by 9 percent quarter-on-quarter in the North American market. LG noted that it was met with increased marketing expenditure and the slow initial sales of the LG G5 which led to an operating loss. Elsewhere, LG's home appliance division posted a profit of 433.7 billion won ($373.24 million), while its television division posted a profit of 356.7 billion won ($306.97 million). The television segment recorded revenues of 4.2 trillion won ($3.58 billion), with LG seeing a sharp increase in sales of its high-end 4K TVs which the company is known for. As for the third quarter of the year, LG will be hoping for its yet to be announced new V series phone to boost sales in the high-end segment, with the V and K series to boost sales in the mid-range and budget segments.