LG's mobile business has regularly been on the knife's edge of profitability over the years, and after last year's lackluster G4, the company likely hoped the more adventurous G5 would help pay the smartphone arm's bills and, perhaps, even deliver a profit to the unit. Unfortunately, according to LG's Q2 2016 fiscal results released today, that effort has not paid off.
LG Mobile reported an operating loss of $132 million for the second quarter, the first full fiscal quarter the G5 was on sale in major markets (it launched April 1st here in the US). This is especially dismal given that it marks only a very modest improvement over LG's Q1 results for its mobile unit, which saw losses of around $168 million. Sales versus the first quarter ticked up 12%, which doesn't seem like a lot given how much weight LG threw behind the G5.
Given that any major product's first quarter on sale is likely to be its most successful, this almost definitely means the G5 won't be making a sudden sales comeback. LG even pointed the finger at the device in its press release today, saying the loss reflected both heavy marketing costs and "somewhat slow initial sales of G5 smartphone." Something tells me they aren't going to get any faster, which means that in corporate speak, LG's saying this smartphone was a sales dud.
The release already starts looking forward to other smartphones LG hopes will boost the unit back up, including an unannounced V-series device that will launch, apparently, some time in LG's fiscal Q3 (essentially, between August and November). LG also hopes the K and X series mass-market phones will continue to drive profits as they ship in more regions around the world.
This can't feel especially good coming on the same day Samsung announced its IT & Mobile division recorded a $3.83 billion Q2 profit thanks in large part to the runaway success of the Galaxy S7 and S7 edge.
LG did still manage to record a substantial overall operating income for the entire corporation, though, at just over $500 million, mostly owed to the successes of its home appliance unit.