LG swings to a loss as TV, phone sales slump
The company's handset business is going through a rough transition as it works to improve its smartphone lineup.
LG Electronics swung to a loss in the third quarter as its television and handset businesses suffered a sharp decline in sales.
LG reported a third-quarter loss of 414 billion Korean won ($366 million), compared with a year-earlier loss of 8 billion Korean won. Revenue fell 4 percent to 13.4 trillion Korean won ($11.8 billion).
The chief culprits came from the handset and television business. LG's handset business saw declining sales in both its basic phone business, which it has been purposely ratcheting down, as well as its more profitable smartphone business. Unlike other handset manufacturers such as Samsung Electronics or HTC, the company has yet to truly crack the market with a breakout hit smartphone using Android. Instead, it has opted to go after the mass market with its smartphones, rather than with a full high-end device.
LG's overall share of the market fell to 5.1 percent due to a surprisingly strong overall market, according to Oppenheimer & Co. analyst Ittai Kidron.
In the U.S., the company has struggled to establish an identity with its smartphones. LG has its phones at all of the major carriers, but none of them are particularly high profile. It's first 3D smartphone, the Thrill 4G, was beaten to the market by HTC's Evo 3D. The company said it plans to launch more 4G LTE smartphones to take advantage of the growing demand for faster devices.
Its home entertainment business, meanwhile, continued to see weak consumer demand around the world, as well a decline in the average selling price of its products. Its LCD monitor business also fell amid weak IT demand from businesses.
LG plans to bulk up its marketing efforts in promoting its 3D and smart televisions for the fourth quarter. The company expects the industry to offer more promotions during the holiday selling season.
The company, however, saw improving sales in its home appliance and air conditioning products in the period.