Analysts Cut LG Profit Estimates as G4 Lags in Sales

The LG G4 was hailed as an excellent phone all over the internet but it seems that has not shown in the sales numbers. Many analysts have reduced their forecasts for the second quarter over concerns about LG’s latest flagship.

At the time of launch, LG G4 was expected to sell 8 million units in 2015, around 2.6 million units per quarter. However, the second quarter shipments are expected to be less than 2.5 million meaning that actual sales might be even lower than that. This has led analysts to slash profit estimates and now it seems the company might not even match the $66 million operating profit it posted in Q1 2015.

One of the reasons that could have hindered the G4 sales is its pricing in different markets. Another could be the lack of major improvements over the G3. The biggest factor might have been LG’s promise of releasing another flagship device later this year which could have resulted in potential customers delaying their purchases until it is released.

Despite excellent reviews, LG G4 has failed to meet sales estimates

Aside from the G4 sales, LG’s marketing expenditure has definitely reduced the company’s profits. LG has increased their marketing expenditures over the first quarter to present the G4 as a competent alternative to the likes of Samsung Galaxy S6 and Apple’s iPhone 6. Additional marketing expenses mean lesser profits per device.

Daishin Securities and Korea Investment & Securities have decreased their expected forecasts for LG Mobile division to $50.7 million from $92.3 million and $61 million from $104 million respectively. Another firm, NH Investments & Securities has lowered their forecast to $58 million from $86 million too.

The joint consensus boils down that LG’s operating profit will fall somewhere between $54 to $59 million which is considerably less than Q1’s $66 million and Q4 2014’s operating profit of $78 million.

LG’s whole smartphone business is not going downhill as the company said that it would invest $155 million in India and could even set up production there. LG G4 is yet to go on sale in some markets and this could also mean more sales in the future which might compensate for the currently under-performing sales figures.

via Talk Android

He is the Editor-in-Chief at ProPakistani. Reach out at aadil.s[at]

Ltd feature videos

Watch more at LTD