They estimated the mobile division’s operating deficits at over 200 billion won in the Q2, which would mark the ninth consecutive quarterly loss.
Although LG’s first 5G smartphone, the V50 ThinQ, was well-received in the domestic market since its launch in early May, it failed to provide a strong momentum to help the mobile division make a turnaround in the second quarter, they noted.
The Korean phone maker launched the V50 in the US in partnership with Sprint and Verizon in the last two months, but the initial response was lukewarm with lack of 5G infrastructure in the nation.
LG’s share in the US smartphone market stood at 16 per cent in 2018, according to industry tracker Strategy Analytics.
“LG V50 ThinQ failed to contribute sales increase in the North American market.
“Given the heavy marketing costs, the 5G smartphone was limited in improving the mobile division’s profitability,” said Park Gang-hoo, an analyst at Daishin Securities.
Market watchers say a strong demand for LG’s home appliances might have improved its overall sales.
LG Electronics has enjoyed brisk sales of products related to air quality, such as air purifiers, dryers and clothing-care home appliances and revenue from their rental service has also been on the rise as more people opt for renting gadgets.
“The home appliance businesses drove up to the overall performance thanks to robust sales of the premium lineup and new lifestyle products, such as air purifiers and garment dryers.
“LG’s TV business likely suffered due to weak demand for LCD products and intensifying competition with Chinese makers and its smartphone division continued to book losses,” Koh Jung-woo, an analyst at NH Investment & Securities, said.
Shares of LG Electronics tumbled 5.22 per cent to 72,600 won on the Seoul bourse, far below the KOSPI’s 0.09 per cent gain. The earnings guidance was announced before the market closing.