LG Electronics faces a bleak outlook after it reported a record quarterly operating loss, battered by its weak mobile phone business.
Like Nokia, LG has fallen behind in the lucrative smartphones segment to Apple and Samsung Electronics.
Intensifying price competition among flat screen TV makers such as Sony Corp and Panasonic in the run-up to Christmas has also dealt a double whammy to LG, the world's second biggest TV brand.
The South Korean firm is expected to show another loss in the current quarter with the handset unit likely to report a third straight quarterly loss.
The results are the first since Koo Bon-joon, a member of LG's founding family, took over as chief executive of the group's flagship firm this month, with a mission to turn around its loss-making handset operations and restore sales growth.
Mr Koo has replaced the heads of the struggling phone and TV divisions and made it mandatory to start internal meetings and briefings with chanting: "Let's be sure to become Number One."
LG shares ended up 1 per cent in a steady wider market as the losses were not as severe as some had expected, with few analysts predicting a loss of 250 billion won.
The stock has fallen 17 per cent so far this year versus a 14 per cent gain in the market.
LG swung to a record 185 billion won ($163.7 million) operating loss in July-September from a profit of 851 billion won a year ago, meeting a consensus forecast of 185 billion won loss.
Losses from the handset business snowballed to a record 304 billion won and margins plunged to a negative 10 per cent, hit by a weak smartphone lineup and growing development and marketing costs to prop up faltering sales of low-priced models.
LG is hoping its Optimus One model, running on Google's popular Android platform, and Optimus 7 based on Microsoft's Windows system, both unveiled in October, will help it successfully shift to the lucrative smartphone market.
The low-end smartphone, which has received some good reviews in Korea, has been sold 200,000 units since its launch three weeks ago. LG wants to sell at least 10 million units of the model but it faces pressure as rivals lower prices.
LG's TV business profit margin halved to 2.3 per cent from a year ago as it offered steeper discounts to hold market share and fight competition.
Reuters