Mobile still do not work in LG, what are their strongest divisions?

Good for the normalization of the terminals or because users increasingly less renew these, mobile divisions of some manufacturers strung several not too good results for some time, such as Sony or Microsoft. Today in fact we have just seen with the results of the last fiscal quarter, although in the case of this company is not only dedicated to mobile. What are the strong divisions of LG?

The data published regarding economic data often are not usually specific, having us to settle petty tracks what are the critical points (and with some luck, products). What we see in LG’s latest report is that the mobile division is not being much less pulling the car, with a LG G5 that is resulting in sales as expected.


Image Source: Google Image

The moving average range works, but that is not enough

In January we saw as quarterly results for the fourth quarter of 2015 (and year) sales of mobile were not bad, but was below Samsung and Apple, despite being somewhat higher than those of 2014, did not seem to follow for example pace Huawei showed itself.

The first fiscal quarter of 2016 was proof that mobile definitely not going well, showing a loss of 156 million dollars? A balance came in April; two months after filing the LG G5 and this time more than the flagship touches launch each year ship: this time it was the staging of a very different setting aside the conservative and traditional for knock on the door of a public who seek change.

But just the marketing and promotion of this striking phone (though not as profitable) were the cause of much of those losses. Moreover, in the quarter and falling sales over the previous year (considering that this year’s top of the range presented in the MWC and sold in April, and no later), registering a fall in revenue of 15, 5% to 12% in number of units purchased.

Today we saw the results of the second fiscal quarter for LG. Again the numbers were not favorable for the sale of mobile , although they have at least been less favorable than in the previous quarter, with reduced sales by 1% (the last was 3%) and an average range that manages network to act this fall to stop it (the lines LG LG K and X, which increased sales by 8%).

But LG is a brand that goes far beyond mobile and already we saw in 2016 in Budapest between InnoFest as large as thin TVs, cleaning robots with cameras and buttons that give the touch smart to other devices among other things. What then are the strengths of the brand?

The home, that great friend of LG

Any growth is good news though at first glance may seem an insignificant percentage. We looked at the results of this quarter LG achieved a 0.6% more revenue than last, about 12,050 million dollars, but after that there is a 140% more profit than the same point last year: 503 million dollars due mainly to air conditioners and televisions.

In fact the other devices have good results in the past, when and mobile began to slack off. Two years ago we could see how the TVs were most contributed revenue (500 million dollars). There was still seeing the growth of the mobile division and indeed in the second quarter of 2015 TV sales were down 7.6% compared to 2014 while mobile rose 1%.

The division was up strongly at that time was that of air conditioners with a 10% growth over the same period last year. While this, by the household devices, ranging in income from 2014, experiencing an increase from the fourth quarter of 2015 according to data from Statista.

You may also like to read another article on Lab-Soft: The path of Huawei and Xiaomi to OLED screens going through LG

Is it working restructuring?

If we analyze the organization of LG products, what we see it is that some of the divisions undergo restructuring (as it did this year the mobile), with some cuttings from other existing sectors that become a new division in together with another. Specifically, if observables income earned between 2011 and 2015 according Statista, we see that the initial division of Home Entertainment, Mobile Communications and Home Appliance become more, being in Air Conditioning & Energy Solutions, Home Appliance and Air Solutions, Vehicle Components, Mobile Communications and Home Entertainment. Income which, incidentally, in total have been gradually falling.

This makes it somewhat confusing to discern which products are best result, but we know that LG currently still in second place in TV manufacturers with more sales below a seemingly unattainable Samsung. Koreans have been rather short on detail in its statement of results this quarter (which links with them at the beginning), but according to Reuters analysts point to the fact it has reached a maximum profit in the last two years (503 million dollars) is mainly thanks to the appliances and televisions. The best result since the second quarter of 2014 (542 million dollars).

What also point is that the company would have benefited from an increase in demand for air conditioners in certain markets and demand peaks with major sporting events such as the UEFA 2016. However, pessimistic of over the next balances (perhaps partly due to the seasonal component that was beneficial in this case) and again with pessimism towards sales of LG G5 extending the mobile division in general.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.