LG Electronics Q3 Operating Profit Down 8.4% to 688.9 Billion Won... Sales Also Decline

Preliminary Q3 Results Announced
Operating Profit and Sales Exceed Forecasts
But Both Decline Year-on-Year
Sales Reach 21.8751 Trillion Won, Down 1.4%
Impacted by Tariff Burdens and Voluntary Retirement

LG Electronics announced its preliminary results for the third quarter of this year, reporting declines in both sales and operating profit compared to the same period last year, due to the increasingly challenging external environment such as the full impact of U.S. tariffs.

Seoul Yeouido LG Twin Towers panorama. Photo by Kang Jinhyung aymsdream@

On October 13, LG Electronics disclosed that, on a consolidated basis, its operating profit for the third quarter of this year was provisionally tallied at 688.9 billion won, an 8.4% decrease from the same period last year. Sales reached 21.8751 trillion won, down 1.4% year-on-year. However, both operating profit and sales exceeded market expectations. Sales marked the second-highest figure for a third quarter in the company’s history, and operating profit was more than 10% higher than recent market forecasts.

LG Electronics explained that the results were influenced by non-recurring factors such as increased tariff burdens due to changes in the trade environment and the implementation of a voluntary retirement program for employees over the age of 50 or those with several years of low performance, as part of efforts to promote positive workforce circulation.

On a positive note, the company assessed that strong performance in home appliances and vehicle components enabled it to surpass market expectations. While the home appliances business continued to face tariff burdens on U.S. exports and a delayed recovery in global demand, LG Electronics believes it has maintained dominance in the premium market based on industry-leading competitiveness.

The vehicle component business is expected to have achieved record-high profitability in the third quarter. The expansion of premium product sales in the automotive infotainment business appears to have made a significant contribution to profitability. The business model is being diversified from products to vehicle content platforms and more. As the lamp and electric vehicle component businesses accelerate the streamlining of their business structures, the company aims to secure stable future growth based on a high order backlog. The media entertainment business recognized one-time costs due to the voluntary retirement program implemented for workforce circulation. From a business perspective, intensified competition in TV sales led to increased marketing expenses.

Looking ahead, LG Electronics announced plans to further strengthen the competitiveness of its webOS platform and focus on diversifying its profit structure. Key strategies include advancing its advertising business and expanding content offerings. The company will also accelerate its efforts to target the 'Global South,' where TV demand remains relatively strong compared to other regions.

The heating, ventilation, and air conditioning (HVAC) business will focus on securing future business opportunities by prioritizing commercial air conditioning systems and industrial/power plant chillers. With recent large-scale orders for artificial intelligence data center (AIDC) cooling solutions in North America, Central and South America, the Middle East, and Asia, the company plans to use these achievements as references to continuously expand the potential of its business. LG Electronics also stated that preparations for the commercialization of liquid cooling solutions for data centers, considered next-generation technology, are proceeding smoothly.

This content was produced with the assistance of AI translation services.