Weak demand for TVs sends LG down in second quarter
Company reports that its smartphone division also had some trouble in the second quarter as unit shipments fell 3 percent year over year.
LG Electronics, which sells everything from televisions to smartphones to refrigerators, had a tough but still slightly profitable second quarter.
The South Korea-based electronics giant tallied 13.9 trillion Korean won ($16.2 billion) in sales during the second quarter (PDF), down 7.6 percent compared with the same period last year. LG was able to nab a small profit of 226 billion won, though that was down nearly 50 percent from 412 billion a year earlier.
Chief among LG's troubles during the period was its Home Entertainment division, which saw sales tumble 18 percent year over year. LG said the division was hobbled by weak global demand for televisions, especially in the key markets of Latin America and Europe. LG also reported that its Mobile Communications division, which includes smartphones such as its Android-based G4 flagship, saw shipments fall 3 percent year over year to 14.1 million units.
LG Electronics is a giant in the technology industry with a focus on four main units: Home Entertainment, Mobile Communications, Home Appliance & Solution, and Vehicle Components. The company is one of the most popular TV makers in the world, alongside Samsung, and has an offshoot in LG Display that builds screens for a wide array of products, including Apple's Mac line.
Despite a somewhat disappointing second quarter, LG is still hanging on in the smartphone market. Research firm TrendForce reported last week that LG is the fifth-largest smartphone maker in the world with 5.8 percent market share. According to LG, its devices have grown in popularity n North America, where sales were up 36 percent year over year. In its home country, LG's mobile sales fell by 29 percent year over year on weaker demand.
Looking ahead, LG said it anticipates a turnaround for its television business, thanks to expected demand for its higher-end televisions. In mobile, LG said that while its business could face some trouble in emerging markets, its flagship G4 smartphone and the launch of new models should boost its operation in the third quarter. Still, the company acknowledged that keeping afloat in mobile won't be easy.
"Expect overall market competition to gain market share to be fierce due to the launch of new models in the premium segment from competitors and continuous price competition in the mass segment," the company said in a statement.
LG did not immediately respond to a request for comment.