Despite selling 12 million smartphone, the South Korean company's mobile business posts first operating loss in five quarters. October 23, 2013 11:44 PM PDT Marketing costs hurt the profitability of LG's G2 smartphone. (Credit: Josh Miller/CNET) LG Electronics' announced Thursday that its third-quarter net income slid 34 percent due to price cuts and marketing costs associated with its latest flagship handset launch. The South Korea electronics maker reported net income of 108.5 billion won ($103 million) for the three-month period ended September 30 compared with 156 billion won for the year ago period. Related stories LG may launch its own Chrome OS devices LG unveils 'pocket-sized' G Pad 8.3 tablet LG files trademarks for GPad, G Watch, G Glass Even though the company reported selling 12 million smartphones for the quarter, the company's mobile communications business slipped into the red for the first time in five months, recording an operating loss of 79.7 billion won ($75.5 million) on sales of 3.05 billion won. The company had hoped to get a boost from its 5.2-inch G2 smartphone, which was launched in August. But its profitability was hurt by higher marketing costs promoting the handset and increased competition from Samsung and Apple, which forced it to cut prices. Meanwhile, the company's home-entertainment division had an operating profit of 124.4 billion won in the third quarter on declining global TV demand. Overall, the company recorded quarterly sales of 13.9 trillion won ($12.5 billion), a 5 percent increase over the year-ago period but an 8.8 percent decline over the previous quarter. Operating profit increased 27 percent to 217.8 billion won ($196.34 million).
Despite selling 12 million smartphone, the South Korean company's mobile business posts first operating loss in five quarters.
Marketing costs hurt the profitability of LG's G2 smartphone.
(Credit: Josh Miller/CNET)
LG Electronics' announced Thursday that its third-quarter net income slid 34 percent due to price cuts and marketing costs associated with its latest flagship handset launch.
The South Korea electronics maker reported net income of 108.5 billion won ($103 million) for the three-month period ended September 30 compared with 156 billion won for the year ago period.
Related stories
- LG may launch its own Chrome OS devices
- LG unveils 'pocket-sized' G Pad 8.3 tablet
- LG files trademarks for GPad, G Watch, G Glass
Even though the company reported selling 12 million smartphones for the quarter, the company's mobile communications business slipped into the red for the first time in five months, recording an operating loss of 79.7 billion won ($75.5 million) on sales of 3.05 billion won.
The company had hoped to get a boost from its 5.2-inch G2 smartphone, which was launched in August. But its profitability was hurt by higher marketing costs promoting the handset and increased competition from Samsung and Apple, which forced it to cut prices.
Meanwhile, the company's home-entertainment division had an operating profit of 124.4 billion won in the third quarter on declining global TV demand.
Overall, the company recorded quarterly sales of 13.9 trillion won ($12.5 billion), a 5 percent increase over the year-ago period but an 8.8 percent decline over the previous quarter. Operating profit increased 27 percent to 217.8 billion won ($196.34 million).
