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LG reports $68 million loss in third quarter, as smartphone business fails to find form

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Jessica Lee Star/Digital Trends
LG reported its first mobile operating loss this year in the company’s third quarter financial results, losing $68 million in the three-month period spanning from July to September.

The South Korean electronics giant sold 15 million smartphones in the quarter, but the average sale price was lower than a year ago. LG claims in the next quarter it should see the average sale price rise with the launch of the LG V10 and Nexus 5X, combined with more sales worldwide.

LG noted a 39-percent reduction in operating profit across its entire business, but still managed to report a $259 million operating profit. Total sales were down five percent to $12.3 billion.

We didn’t get an exact sales figure for the LG G4, but based on an estimated 15 million total sales, the flagship is well behind the front-running phones offered by Apple, Samsung, and Huawei. LG also refused to release information on wearable sales, but reports claim it is under-performing in that market as well, with Apple and Samsung emerging as the two most popular vendors.

LG did confirm it made a profit on its TV business, and this is the first time in a year that it has done so. The company’s home appliance business made 80 percent of its third quarter profit, but that is a far cry from the performance analysts wanted from LG.

Financial reports across the Android device manufacturers have a similar tone this quarter: lower profits, a drop in sales prices, and a lack of products on the market. Chinese vendors Huawei and Xiaomi appear to have weathered the storm, however, with the former recently overtaking Apple for first place in the Chinese market.

It is still questionable whether LG will be able to return to profitability in the fourth quarter. The LG V10 doesn’t offer huge upgrades from the LG G4, and the Nexus 5X is overshadowed by its larger sibling, Huawei’s Nexus 6P. The market is currently flooded with new devices as well, including the Moto X Force (Droid Turbo 2) and OnePlus X coming later in the year.

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