LG Expecting Record Profits In Q3, Mobile Division Expected To Continue Struggling

In short: LG is expecting record profits for the third quarter. It is expecting to bring in around 2.6784 trillion won which beats the previous yearly high of 2.66 trillion won back in 2009. So it’s a pretty big deal for LG, seeing as it hasn’t brought in that much profit in nearly a decade. But as expected, the mobile division is still going to be struggling through the third quarter. LG expects the mobile division to report losses of over 600 billion won this year. That is slightly less than what it lost last year, but still a pretty big loss for LG and its mobile division. LG is also expecting this loss to decrease more sharply next year, as the cost-cutting efforts continue.

Background: LG’s mobile division has been struggling since, basically when it started making smartphones. Many smartphone makers do not make any profits from their smartphone businesses, and that’s because there is so much competition and very little money to be made –  unless you are Apple, Samsung, Huawei or Xiaomi. The good thing for LG is that it is a huge electronics conglomerate, so its other businesses are able to offset the losses from its mobile division. The cost-cutting at LG is already starting to take effect, and there is more planned going into next year, so LG might be able to cut enough to get back into the black. But LG desperately needs to make a phone that is going to sell well, and not be overshadowed by what Samsung or Apple is selling.

Impact: This isn’t going to doom LG, as mentioned, LG does have other businesses that are doing very well, and the company has said that it will not be getting out of the smartphone market anytime soon. That’s a good thing for those that do like LG’s smartphones, but it is going to mean that LG needs to work harder on its smartphones, and marketing, so it can not only sell more, but also pick up more market share.

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