It's LG's turn to show its report card - things are looking up, but the handset division is still struggling to turn a profit. It posted a $49.8 million operating loss for the second quarter of 2011, though that's only about half of what it lost in Q1 2011. Shipments of LG phones grew quarter-over-quarter (QoQ) to 24.8 million units, with smartphone numbers on the rise as feature phone demand decreases. Sales are up 11% QoQ to a total of $3 billion, thanks to better smartphone sales. However, on a Year-over-Year (YoY) basis, LG's sales are still are down 5%.
LG's handset division posted $49.8 million in operating loss, which is a market improvement over the $96.3 million operating loss for Q1 2011, or the $114.5 million operating loss for Q2 2010. This also marks the fifth consecutive quarter in which the handset division posts a loss.
The Optimus 2X was a strong performer for LG overall, joined by the Optimus One in the US and by the Optimus Black in Europe, where feature phone sales were weak. The Optimus 2X had various software issues, which plagued sales in the US, that LG is only now getting around to fixing, including pushing out the Gingerbread update.
For the next quarter, LG will be introducing new models to improve profitability and expects demand for 4G LTE and 3D capable handsets to heat up.
The company as a whole posted a net income of $103 million for this year's Q2, a sharp drop from the $816.6 million from the year-ago second quarter. Nevertheless, after two quarters of loss (Q1 2011 and Q4 2010) and a break even quarter (Q3 2010) before that, those are encouraging results.
Home entertainment is largely responsible for the profitable second quarter of 2011, with Cinema 3D and LED TV sales pointed out as a main driving force. This bodes well for LG's hopes of good performance of 3D-enabled mobile gadgets.
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