LG Electronics expected to trim smartphone losses this year
SEOUL-- LG Electronics Inc. is expected to narrow losses from its money-losing smartphone division this year, thanks to ongoing cost-cutting measures, according to credit appraiser Moody's Investors Services on Saturday.
Citing the restructuring effort in its mobile division and solid earnings in its home-appliance division, Moody's raised its ratings outlook for LG to stable from negative. The outlook was released by the credit rating agency earlier this week.
LG's smartphone division has suffered operating losses since the third quarter of 2015, with its flagship smartphones failing to appeal to consumers amid tougher competition with Chinese brands.
Gloria Tsuen, a vice president at Moody's, said in the statement that the change in ratings outlook for LG reflects the company's "improved margins, driven by the restructuring in its mobile communications division and the steady performance of its home appliance and air solution division, and home entertainment division."
Moody's expected LG's smartphone losses to "narrow significantly this year," compared with a loss of 1.3 trillion won (US$1.14 billion) last year.
Source: Yonhap News Agency