LG reports highest profit in two years despite disappointing phone sales

LG posted a higher profit in the second quarter of 2016 than in the same quarter in the past two years. The Korean company attributes this mainly to the sale of high-end TVs and household appliances. Phone sales fell again.

In the quarterly figures report, LG states that the disappointing sales of the G5 in combination with high marketing costs have caused losses for the mobile branch. These amount to 153.5 billion won, which is approximately 122 million euros. The company’s total operating profit in the second quarter amounted to 584.6 billion won, or approximately 468 million euros. This is an increase of 140 percent compared to the second quarter of 2015.

This profit was achieved, among other things, by the sale of high-end OLED and ultra-HD TVs and rose by 5.7 percent compared to the previous year to the equivalent of 285 million euros. LG also announced this week that it wants to invest 1.6 billion euros in the production of OLED panels for mobile devices. LG’s household appliances are also doing well, with profits increasing by 2.7 percent to the equivalent of 347 million euros. The company writes that this profit has been realized despite rising marketing costs.

The expectation for the third quarter is that the demand for high-end TVs will continue to increase and that the market for the premium line of household products will also continue to grow. In the field of phones, LG expects increasing competition due to the release of top models from other brands. The company wants to counteract this in part with the release of a new V10 smartphone model. LG presented the first version of this model in October 2015 and later announced that it would also be available in Europe.