SEOUL, May 29 (Korea Bizwire) — LG Electronics Inc. is likely to cut losses in its smartphone business in the coming months, but the company’s efforts to revive its mobile fortunes are “highly dependent” on sales of the flagship G6 smartphone, an assessment by an international ratings agency said Saturday.
LG’s smartphone division has posted operating losses since the third quarter of 2015 but posted significantly improved numbers in the first quarter of this year.
In a statement released earlier this week, Standard and Poor’s expected LG’s smartphone division to reduce losses “to some extent over the next several quarters,” mainly thanks to cost-cutting efforts.
“However, we still see some uncertainties over the magnitude of loss reduction, which will be highly dependent on the outcome of the company’s new flagship smartphone G6,” the statement said.
S&P raised its outlook for LG to stable from negative, citing the company’s “good operating performances and possibility of stable financial metrics over the next two years.”
Last month, LG said its overall operating profit jumped 82 percent on-year to 922 billion won (US$824.2 million) for the January-March period, due to healthier sales of its home appliances.