LG Electronics announced another quarterly loss from its mobile business, although increased sales of smartphones and cost reduction initiatives have enabled it to significantly reduce its deficit year-on-year. The company’s Mobile Communications business reported an operating loss of KRW54 billion (US$51.43 million), compared with a prior-year net loss of KRW119 billion, on sales of KRW3.25 trillion, down from KRW3.4 trillion. For its handset business, which contributes 99 percent of Mobile Communications sales, the net loss was KRW55 billion, compared with a KRW120 million loss in the prior year, on sales of KRW3.2 trillion, down from KRW3.37 trillion. It noted that while smartphone sales have increased, there was a “relative decline” for its feature phone business.

Unit shipments in the second quarter increased “slightly” to 24.8 million. The company recently reduced its full-year target to 114 million from 150 million, according to reports, warning that “it’s difficult to give a precise prediction when our business will turn around due to a fast changing external market environment.” LG has not reported a profit from its Mobile Communications division since the first quarter of 2010, but the current loss is the smallest since then. For the third quarter, LG said that competition is expected to intensify, with handset makers launching new devices including 3D smartphones, and with LTE penetration expanding among developed markets. In order to counter this, it intends introduce “new models with hardware competency and gain profitability by improving product mix.”