LG Electronics missed profit forecasts in Q3 2013 with marketing costs surrounding the LG G2 launch being blamed for its mobile business seeing losses widen compared with the previous year.
The marketing campaign run in support of the LG G2 meant that it lost money on its smartphone business despite selling 3.05 trillion won [£1.7 billion] worth of devices, 24 per cent more than the same period in 2012. In terms of device numbers it kept pace with the previous quarter with 12 million smartphones shipped by the world’s third largest smartphone manufacturer.
It was only when marketing costs linked to the new device were taken into account that the handsets part of the business showed a loss of 80 billion won [£4.6 million] compared to just 4 billion won [£232,000] in Q3 2012 and 61 billion won [£3.5 million] in Q2 2013.
Operating profit for Q3 came in at 218 billion won [£127 million], which was below the consensus forecast of 306 billion won [£178 million] by Thomson Reuters I/B/E/S but showed an increase compared with the 171 billion won [£99.5 million] profit in Q3 2012, according to Reuters.
When it came to LG’s TV business the downward spiral continued with revenues down seven per cent to 5.01 trillion won [£2.7 billion] compared with Q3 2012 as “slower global TV demand” along with “lower selling prices” and “softness” in the European market to blame.
LG announced the G2 handset at a plush launch event in New York City back in August with the smartphone becoming the first such device to ship with a powerful Qualcomm Snapdragon 800 quad-core processor.
Up next the company is set to release a smartphone with a flexible OLED screen as it continues to go head-to-head with fellow South Korean firm Samsung in the smartphone and television sectors.