LG Electronics expects to report a sharp drop in Q4 operating performance, and while the company did not cite a reason its struggling mobile business appears to be the main culprit.
The company predicted a Q4 2016 operating loss of KRW35.3 billion ($29.6 million) compared with a prior-year profit of KRW349 billion, on revenue which increased 1.5 per cent year-on-year to KRW14.8 trillion.
LG previously said its mobile focus during Q4 was on maximising sales of its V20 high-end device and mid-tier smartphones, while also completing “business improvement activities” in the unit.
Although the company’s revenue was boosted by the lucrative Q4 holiday sales period for its home appliance and entertainment businesses, the rise was accompanied by increased marketing costs in these competitive markets, which is also likely to have dampened profitability.
In previous quarters, profit from LG’s other businesses more than offset weakness at its mobile division.
A Wall Street Journal report earlier this week said LG’s next flagship smartphone will drop the modular design of last year’s G5 (pictured) which, while being innovative in a market sector characterised by incremental improvement, failed to find significant success with buyers.
The report also said the consumer electronics giant was not looking to split out the mobile unit, despite its recent poor performance.