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LG reports lower profit, keeps bleeding money in mobile

Life's bad

LG reported disappointing earnings for the second quarter and pinned the blame for the slump on its underperforming mobile division.

Total net income was just $138 million, up 50 percent year-over-year, but still 35 percent lower than the previous quarter. Luckily, LG's TV business did rather well, offsetting part of the loss attributed to mobile.

The Korean consumer electronics heavyweight recently pulled the plug on its tablet range, but it seems Optimus phones aren’t doing well, either. Sales of basic handsets declined, while at the same time LG started throwing money at promoting its new smartphones. Despite the effort, Optimus phones failed to gain much traction.

Analysts are skeptical about LG’s long-term outlook in the mobile space and they don’t see much hope for recovery. Taurus Securities analyst Eugene Kim told the Associated Press that it’s tough to be sure about LG’s possible recovery. Taurus Securities currently has a hold rating on LG.

More here.

Last modified on 25 July 2012
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