Skip to main content

Poor G5 sales be damned: LG expects its best second quarter since 2014

LG G5 Friends
Samsung is not the only South Korean phone maker in town that expects a strong second quarter, as fellow South Korean outfit LG expects a two-year high in operating profit, reports Reuters.

According to LG, through a regulatory filing, the company likely made 585 billion won, or $504 million, in operating profit from April to June. That represents the highest operating profit LG has seen since the second quarter of 2014, when the company made 610 billion won, or roughly $531 million.

Analysts believe most of the operating profit comes from LG’s appliances businesses, with unusually warm weather and major sporting events like the 2016 UEFA European Championship as influential factors. Furthermore, the lowering prices of display panels might have helped increase profit margins.

Unfortunately, analysts believe LG’s mobile division will remain in the red for the fifth consecutive quarter, with the G5’s relatively poor sales a contributor to the division’s struggles. LG’s mobile division is expected to have lost 94 billion won, or around $82 million, during the second quarter.

“Despite the G5’s originality, LG sold only 2.2 million units of the strategic model due to stiff competition,” said HMC Investment analyst Greg Roh.

As a result of its mobile division’s struggles, LG had the division restructured through an executive reshuffle. According to LG, the purpose of the restructuring “was intended to keep LG’s handset business running amid challenging market situations.” LG partially blamed the restructuring on the underwhelming reception of the G5.

By comparison, Samsung expects its operating profit during the second quarter to sit at $7 billion, a 17-percent increase from the second quarter of 2015 and the strongest profit showing in over two years. The company attributes the expected success to the Galaxy S7’s and Galaxy S7 Edge’s strong sales.

LG expects to release its second quarter financials in full by the end of July.

Editors' Recommendations

Williams Pelegrin
Former Digital Trends Contributor
Williams is an avid New York Yankees fan, speaks Spanish, resides in Colorado, and has an affinity for Frosted Flakes. Send…
Modular phones at war: Lenovo Moto Z vs LG G5
Moto Z

Lenovo has finally taken the wraps off of the long-awaited Moto Z, the company's latest flagship smartphone, which replaces last year's Moto X. This next-gen Moto smartphone boasts excellent specs, a beautiful design, and a modular ecosystem for adding -- you guessed it -- modules. The Moto Z, however, isn't the only flagship phone out there, nor is it the only modular flagship phone out there. LG released the G5 earlier this year, alongside a host of modular connections that you can add to the phone. But how do the two phones compare when it comes to hardware and software? Check out the spec comparison below to find out.

Lenovo Moto Z

Read more
Unfortunately, LG’s G5 isn’t getting enough help from its Friends
Unfortunately, the G5 isn’t getting enough help from its Friends
LG G5 Friends

The LG G5 is a modular phone. No you can’t replace the screen, processor, or camera, but you can augment the device with feature-boosting plug-in modules, adding new functionality quickly and easily. LG calls these modules and accessories Friends, and although the G5 is at the heart of them, they’re the key to its full potential. Without a Friend, the G5 will be a bit lonely.

LG’s Friends aren’t cases or extended battery packs, they’re way more complicated. They’re also, potentially at least, reasons to go out and buy the G5 over any other smartphone. The initial collection consists of the LG Cam Plus, the Hi-Fi Plus, and the 360 Cam. In the near future, the 360 VR headset will also join in with the fun, along with — hopefully, at least — other modules made by other companies.

Read more
You can buy accessories for your G5 on LG’s website
As modules go up for sale on website, LG teases more 'Friends' to come from third-party developers
lg g5 friends marketplace version 1460982229

Looking for some new accessories for you LG G5 smartphone? You need friends. No really, you need LG's G5 accessory lineup, which is called Friends.

The company launched a Friends marketplace in April to help people keep track of all its modules for the G5, but now you can buy these modules officially from LG's own U.S. website. You can also buy G5 charging cradles and extra batteries from the same site.

Read more