LG just announced its financial results for the third quarter and as you would expect they’re healthy. Being as it is the company is huge nd has six divisions five of which are responsible for the company’s solid returns in Q3 since the latest division, Vehicle Parts was created recently (July). Of interest to us is LG Electronics Inc and LG Mobile Communications Company.
Sales of mobile devices rose by 24% ($2.75 billion) when compared to the same period last year. LG managed to ship about 12 million devices in Q3 to generate those sales. However, its huge marketing budget aimed to make sure it is not left behind by big spenders Samsung and Apple made those gains marginal and the company is realizing that it spent big in its latest global push for its flagship smartphone, G2. LG is said to have spent about 200 million won on marketing of its mobile device. It is not planning to scale down that push though since there will be returns in the long return and the G2’s sales are expected to be reflected in the Q4 earning’s call. Intense competition from the likes of Samsung and the seeming stagnation in device uptake due to saturation of the smartphone market did not help matters either.
To the bad news now: LG’s mobile division made an operating loss of 79.7 billion won on sales of 3.05 trillion won in Q3. That contrasts sharply with the 4 billion won loss a year ago and the 61 billion won profit in the second quarter.