LG Electronics Inc. today announced 2016 operating profits of KRW 1.34 trillion (£0.9 billion), a 12.2 percent increase from 2015. But the profit was put down to strong performances in home appliances, air solutions and home entertainment, with losses from mobile communications and vehicle components.
LG reported a fourth-quarter net loss of KRW 258.80 billion (£127 million), its first quarterly operating loss in six years, and admitted profitability of LG Mobile Communications Company was hampered by weak sales of the G5 smartphone and higher marketing investments.
However, the company reported strong sales of its V20 flagship smartphone, and anticipated improvements in market position in 2017 with the next G Series phone and mass-tier devices in the second quarter following Mobile World Congress. Shipments reached 14.1m units, with 4% quarter-on-quarter growth, but 8% decrease on a yearly basis.
Analysts pointed to cost increases in the mobile business cutting into profit from sales of the V20, and after the disappointing performance of the G5, retailers may be more reluctant to take stocks of its successor.
The G6 is expected to feature a 5.7-inch display with an unusual 2:1 aspect ratio, a headphone jack, and water resistance. However, it’s not believed it will feature a replaceable battery or the modular design which signally failed to appeal to potential customers for the G5.