LG expects 15% decline in Q2 profits, ninth consecutive quarterly loss for mobile arm
LG Mobile continues to struggleBy Rob Thubron
In brief: Samsung isn't the only tech giant predicting a fall in profits for Q2. Local South Korean rival LG also expects a double-digit decline, a result of its long-struggling mobile arm and lower profitability from its TV business.
In its earnings guidance report, LG said it expects a 652.2 billion won ($557 million) operating profit for the three months ending June. That's a long way off analysts' expected 774 billion won and marks a 15.4 percent decline compared to the same period one year ago. Revenue is predicted to be 15.6 trillion won, up 4.1 percent YoY.
While LG did not provide a breakdown for each of its businesses, it's the company's troubled mobile arm that is the biggest problem. Analysts expect the unit will report an operating loss of 200 billion won for Q2, which would be the ninth consecutive quarter it has lost money.
It appears that Q2 will be a repeat of the previous quarter, which saw LG Mobile bring in its lowest level of revenue in roughly eight years. And while the V50 ThinQ 5G, which had its South Korea launch in May, initially did well in the country, interest has waned recently.
KB Securities analyst Kim Dong-won said (via ZDNet) that although LG's home appliances business is expected to see improved profits, Samsung's QLED line of TVs are becoming more popular as LG's OLED televisions are seeing weaker-than-expected sales.
LG's 15.4 percent YoY profit fall isn't good, but it's still better than the 56 percent drop Samsung is expecting---a result of declining DRAM and NAND chip prices.