LG Phones Record 20 Consecutive Quarters of Losses... Q2 Outlook Even Bleaker

Estimated Operating Loss of MC Business Division in Q1 Reaches 200 Billion KRW Range
Prolonged Demand Decline Expected Due to COVID-19 Spread in North America and Europe

[Asia Economy Reporter Han Jinju] LG Electronics has posted losses in its mobile division for 20 consecutive quarters.

On the 7th, LG Electronics announced preliminary figures for the first quarter, with sales of 14.7287 trillion KRW and operating profit of 1.0904 trillion KRW. Among these, the MC Business Division, which is responsible for the smartphone business, is expected to have an operating loss in the 200 billion KRW range.

In the securities industry, the MC Business Division's first-quarter loss is estimated to be around 250 billion KRW. Although the operating loss increased compared to the same period last year (204 billion KRW), it decreased compared to the fourth quarter of 2019 (332.2 billion KRW).

Starting this year, LG Electronics shifted its strategy to launch region-specific specialized products. For example, the V60 ThinQ was released in North America and Japan, while the mid-range smartphone Q51 was first introduced domestically, with a mass-premium new product launch scheduled for next month.

The smartphone business loss is expected to continue into the second quarter. As COVID-19 spread to North America and Europe from March, the decline in smartphone demand is likely to be prolonged. DB Financial Investment researcher Kwon Seongryul analyzed, "Due to COVID-19, flagship model sales have been sluggish and uncertainty around new model launches has increased."

Samsung Securities analyst Lee Jongwook said, "From March, when the impact of COVID-19 began in earnest, restrictions on offline distribution make a decline in operating profit in the second quarter inevitable," adding, "Global smartphone demand in the second quarter is expected to drop by 30%."

This content was produced with the assistance of AI translation services.