SEOUL, South Korea — LG Electronics' latest quarterly report underlined challenges facing global electronics makers as weak TV demand and stiffer competition in smartphones undermine profit.
The results Wednesday showed an 8 percent decline in April-June net profit to 155.5 billion won ($140 million) even as LG's revenue rose 10 percent from a year earlier to 15.2 trillion won ($13.6 billion). Operating profit fell 9 percent from a year earlier to 479 billion won.
LG's TV sales improved a bit and smartphone sales hit a quarterly high of 12.1 million handsets. The smartphone shipment figure was more than double from the year-earlier quarter.
But that was not enough to create bigger profits as consumers snapped up cheaper devices that have lower margins for manufacturers. LG said sales of LCD TVs rose but soft TV demand combined with competition from rivals depressed TV prices.
Even though LG turned around its loss-making mobile unit to the world's No. 3 smartphone supplier, its handset business is not a cash cow like Samsung and Apple's, which dominate the high-tier smartphone market. LG's cheaper smartphones are popular but also burden the company with heavy marketing costs.
To improve its bottom line, LG is rolling out high-end models for its core TV and handset businesses in the current quarter.
Earlier this week, LG began sales in the U.S. market of curved TVs that cost $15,000.
LG and Samsung Electronics Co., the world's two largest TV makers, have invested billions of dollars to make giant TVs with OLED screens, or organic light-emitting diodes, hoping to outclass the crispness and color saturation of other TVs. But there are still challenges to successful OLED mass production, accounting for their high price.
