Analysts adjusting LG Q2 profit estimates down amidst LG G4 disappointment

LG undoubtedly has produced one of this year’s better flagship smartphones with the LG G4 and they are regularly mentioned in the same breath with the likes of industry giants Samsung and Apple. Even with the positive reviews of the device, it is looking increasingly like LG may not meet internal targets for sales of the device which is prompting numerous financial analysts to pull back on their quarterly profit estimates for the company’s Mobile Communications Division.

LG predicted the LG G4 would sell at least 8 million units during 2015, a 20 percent increase over what the company achieved with the LG G3 in 2014. Selling at an expected pace of 2.6 million units per quarter, analysts like Daishin Securities projected profits as high as 102 billion won ($92.3 million USD) while Korea Investment & Securities pegged the number at 115 billion won ($104 million USD). Now that shipments of the device appear to be on the order of 2.5 million units during the second quarter, with sales slated to be even lower than that, profit projections have been scaled back to around 56 billion won ($50.7 million USD) for Daishin Securities and 68 billion won ($61 million USD) for Korea Investments & Securities. During the first quarter of 2015, LG recorded 73 billion won ($66 million USD) in operating profit.

The sales shortfall appears to be related to the general malaise that is hitting the high-end smartphone market although LG did not help themselves by not introducing more differentiators compared to the LG G3. Overall, manufacturers including LG are looking more toward emerging markets, notably India, for sales of budget-oriented phones despite the slimmer margins. LG has also stepped up their marketing efforts as they increasingly try to position themselves as an option to the iPhone 6 or Galaxy S6 devices at the expense of some operating profit.

source: BusinessKorea
via: Android Authority

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