LG Electronics set a new annual profit record in the current decade but its smartphone business is still bleeding money, as revealed by the company’s consolidated financial report for the fourth quarter of 2017. Its total sales amounted to approximately $16 billion in the three-month period ending December 31st, with the figure serving as a basis for $344 million in operating income. LG’s profit for the entire year amounts to over $2.23 billion and is the highest result the company posted this decade, having last surpassed it in 2009. The achievement is almost exclusively attributed to the firm’s entertainment division which saw its operating income more than double during the quarter, having hit nearly $346 million. Its home appliance unit also performed in a promising manner and concluded the final quarter of 2017 over $75 million in the black.
LG’s mobile business continued to struggle, being over $200 million in the red. While that’s only its third consecutive loss, its Q1 2017 results delivered a marginal profit due to massive cost-cutting efforts that LG is unable to repeat. The smartphone division of the Seoul-based tech giant spent two and a half out of the last three years posting heavy losses, having cost the company more than a billion dollars during that period. Mobile sales were still up three percent year-on-year, with the original equipment manufacturer primarily attributing that increase to the V30 series which it said performed well, as well as Google’s Pixel 2 XL which was manufactured by the company. The business suffered from general price hikes in the mobile component market and also made significant investments as part of its efforts to promote the V30, the firm said. LG’s 2018 mobile outlook includes a warning about the rising competition from China and a plan to focus on mid-range and high-end Android smartphones over the next 12 months in order to continue narrowing losses.
The phone maker recently signaled it’s revamping its product strategy and will stop pursuing annual release timetables with its handsets. The shift is expected to result in a delayed launch of the successor to the G6 flagship which was previously expected to debut at MWC 2018 late next month. Instead of an entirely new device, LG is more likely to use the Barcelona, Spain-based trade show as an opportunity to introduce a revised, AI-focused version of the V30 Plus, industry sources said earlier this month.