LG Electronics on Friday said that its profit in the second quarter of 2017 likely increased by approximately 14 percentage points year-over-year but is still set to miss analyst expectations. The Seoul-based consumer electronics manufacturer estimated that its Q2 2017 profit amounts to just over $574.49 million, still more than five percent less than what Thomson Reuters StarMine SmartEstimate expected, with its forecast being based on individual predictions of 18 market analysts. Industry watchers believe that the company's mobile unit once again posted losses in the three-month period ending June 30, while its home appliances and television unit once again ended up in the black, albeit with somewhat thinner bottom lines. The latter is to be expected in light of the fact that spring is traditionally a weak period for appliance manufacturers, though the South Korean tech giant doesn't have many other revenue engines to rely on.
The company is also thought to have increased its marketing spending over the course of this year which is another factor that may have helped push its smartphone division into the red for the ninth quarter in a row, albeit it's possible that its increased promotional spending was funded by the savings made in the manufacturing process of the LG G6. Despite sporting mostly high-end components and competing with other premium devices, the firm's latest flagship is powered by last year's Snapdragon 821 instead of the Snapdragon 835 system-on-chip (SoC), which is thought to have reduced the production costs of the handset in a significant manner, according to a number of industry watchers. While the LG G6 is now believed to be outselling its modular predecessor, the smartphone apparently still isn't doing too well considering that it's advertised much more aggressively than the LG G5, some industry watchers claim.
LG made a drastic product strategy shift with the LG G6, opting to ditch the modular design of its 2016 G-series flagship and designing a handset with a waterproof, nearly bezel-less body, as well as equipping it with a screen utilizing an unconventional aspect ratio of 18:9, i.e. 2:1. The tech giant is also expected to debut the high-end LG V30 in the coming months and more details on its other hardware efforts are expected to follow shortly.