LG today reported a KRW 258.80 billion ($223.98 million) net loss for the fourth quarter of 2016 as a result of the poor performance of its mobile division. It is the South Korean firm’s first company-wide loss in six years, and “weak sales” of the flagship G5 are mostly to blame.
“Profitability was hampered by weak sales of the G5 smartphone and higher marketing investments,” LG said in its statement this morning. The company wouldn’t even disclose how many smartphones it sold in 2016, despite revealing the figures in previous years.
LG did report positive revenues of KRW 14.78 trillion ($12.79 billion) for Q4, which is an increase of 11.7 percent over the previous quarter and a 1.5 percent rise year-on-year. However, its massive loss is particularly painful after the KRW 348.9 billion profit it posted in Q4 2015.
It is even more disappointing when you consider Samsung, one of LG’s biggest rivals in mobile, had to pull its flagship Galaxy Note 7 from the market just months after launch — and still managed to record its best quarter of business in three years.
There was lots of excitement surrounding the G5 when it made its debut at Mobile World Congress last February, mostly thanks to its unique modular design. However, modular add-ons were pricey, and third-party accessory makers didn’t embrace LG’s vision.
What’s more, the G5 itself received some criticism for its software and build quality, despite being a decent handset overall.
LG will now be hoping that this year’s G6, which will be unveiled at MWC next month, will be much more successful. The company has already ditched the modular approach, and according to recent rumors, we can look forward to a premium design with a stunning edge-to-edge display.