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LG just misses 60 million sales in 2015, mobile business struggles to reach profitability

LG V10
Jessica Lee Star/Digital Trends
LG Electronics still has to rely on its home electronics and TV divisions to keep its mobile business afloat, judging by its fourth quarter financial results published in late January 2016. 

The mobile business reported 15.3 million smartphone sales during the last three months of 2015. That is a 12-percent increase in sales compared to the previous three months, but a small decrease in yearly sales. For the entire year, LG managed 59.7 million smartphone sales. That is a modest gain of 600,000 compared to the 59.1 million smartphone sales in 2014, but still narrowly misses the 60 million goal.

Even with the increase in overall sales, sales revenue was down slightly, meaning the average phone sale price was lower in 2015 than 2014. It is the first time LG has sold more than 10 million LTE phones, which might be thanks to improved LG V10 sales in North American markets, which hit 450,000 sales in 45 days.

The mobile business has again failed to post an operating profit. In the last three months, LG reported an operating loss of $36 million for its mobile business, which follows a $63 million loss. The company did not say if it thinks the mobile business will be profitable in 2016, but did mention two flagship models coming in the next twelve months. It blamed sluggish global market demand for TVs and softer growth in the smartphone market for the dip in total revenue, dropping from $51 billion t0 $48 billion year-on-year.

It’s not all bad news. LG’s other divisions are showing promise, with its home appliance division posting a $177 million profit. The TV and vehicle component business also reported profits, but the company as a whole reported a net loss of $117 million. LG is expecting an increase in demand for high-end TVs, which it hopes will include some of its 4K Super UHD lineup announced at CES 2016. There’s also a strong chance the LG G5 will launch at Mobile World Congress next month, meaning there’s plenty to look forward to in 2016.

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