LG’s Preliminary Earnings Hint That Mobile Division Struggles Continue
LG has released its preliminary earnings for the first quarter of 2019, and while it is slightly lower than the record breaking earnings from the same period a year earlier, it’s still some pretty good numbers.
While LG did not specifically state how much money each division made in the quarter – that will come later on, with the final earnings – it is a drop of about 1.4-percent compared to the same period a year ago. This is likely due to the mobile division continuing to struggle. LG has had trouble selling its smartphones in many regions around the world, and even in its homeland of South Korea, where it faces stiff competition from Samsung. It’s no secret that its mobile division is bleeding money, but its other divisions are helping to offset that loss.
For LG, the big segments that usually do quite well, are TVs and appliances. LG is one of the very few TV makers that uses OLED for its TVs. It’s also one of the cheaper OLED TVs out there, considering the other major OLED TV maker is Sony, who is known to be expensive. LG Display also makes displays for its smartphones, as well as other smartphones on the market. So it has done pretty well in the past too.
LG raked in 899.6 billion Korean Won in the quarter. That is equivalent to about $792.77 million USD. Not too shabby at all. LG will be announcing its full earnings later this month. The company does this preliminary earnings to give its investors a heads up as to what’s going on, before the earnings report comes out and shocks everyone. This likely also keeps LG’s stock from getting hit too hard, if it does miss the top and bottom line.
This is up from the average estimation from over 21 analysts in South Korea and Asia. Who have estimated that LG’s revenues for the quarter would be around 808 billion Korean won. So things are in LG’s favor. Though investors may not be too happy that revenues dropped compared to a year earlier. In trading today, LG was down as much as 1.5-percent. Which is pretty modest for this type of news.
It’s not surprising to see LG’s mobile division struggling. This is nothing new, and has been an issue for many years. LG is one of the larger OEMs in the US, but they are a very distant third, behind Samsung and Apple. Which are the only two companies that are actually making money on smartphones right now. That is simply because of how many smartphones they are selling. Of course, the rise in prices have definitely helped them earn even more money, with that huge profit margin. But, like LG, Apple and Samsung also make money from other areas. So even if their smartphone business was faltering, that wouldn’t be an issue, as Macs and TVs still sell pretty well.
As mentioned, the full report will be out later this month, where we’ll be able to see how well (or not so well) the mobile division, and other divisions at LG did during the quarter.
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