LG Electronics is seeking a growth breakthrough by pushing new businesses such as AI, robots, and data center cooling despite a global economic slowdown and weak demand. While the MS Business Division posted a loss due to a sluggish TV business, the vehicle component solutions (VS) business delivered record results, making its structural shift visible.
On Apr. 29, during its 2026 first-quarter earnings conference call, LG Electronics said, "On a consolidation basis, first-quarter revenue was 23.7272 trillion won and operating profit was 1.6737 trillion won. Despite a difficult business environment, including conflicts in the Middle East, geopolitical risks, weak consumer sentiment, and intensified competition among companies, revenue grew year over year on the back of peak season effects in appliances and stable orders in vehicle components."
It added, "Operating profit increased 32.9% from a year earlier and improved despite rising raw material prices and expense increases, supported by expanded sales of high value-added products and efforts to reduce costs and expenses," and "The HS (appliances) and VS businesses posted their highest-ever quarterly revenue, and the VS Business Division also achieved a record-high level of operating profit."
Uncertainty is expected to continue in the second quarter. The company said, "Fluctuations in oil prices, upward pressure on raw material prices, and supply chain disruptions are likely to act as burdens by driving volatility in global demand," adding, "For our core businesses, we will closely analyze demand trends and promote region-specific strategies while securing a revenue growth momentum through our Global South strategy." It added, "We will strengthen early inventory buildup, production stability, and cost stability, and minimize the impact of rising logistics costs through large-cargo negotiating power and improved carrier operating efficiency."
It put AI-based robots and the data center business at the forefront as new growth engines. LG Electronics said, "We view AI not as a mere technology but as core infrastructure that supports industry and daily life," adding, "We are expanding strategic collaboration with Nvidia beyond our existing cooperation into the realm of physical AI." It added, "We discussed cooperation plans across various areas such as robots, mobility, and data centers, and are pursuing advanced R&D, including building joint references, by combining our hardware strategy and data with Nvidia's technology leadership."
The home robot business is also gaining speed. The company said, "For the CLOi humanoid business, we are conducting proof-of-concept (POC) validation this year and plan to expand into industrial and home domains starting in the first half," adding, "We will verify feasibility based on industrial robot technology and process data and leverage our competitive edge in home insights accumulated in the appliance business to lay the groundwork for commercialization in 2028."
The robot components business is also moving into full swing. LG Electronics said, "We plan to begin mass production of initial volumes for actuators within the first half, and we are promoting in-house development of reducer technology through industry-academia cooperation," adding, "We will build product development and production bases on the strength of our motor technology competitiveness and expand our product lineup centered on robotic arms."
The AI data center cooling business is also growing rapidly. The company said, "Orders in 2025 have grown about threefold year over year, and we expect to achieve our 1 trillion won revenue target for the chiller business ahead of schedule by 2027," adding, "After passing preliminary stages such as vendor registration, we expect full-scale orders and revenue conversion beginning in 2026." It added, "Lead time is about six months for standard chillers and about nine months for large custom equipment, and we are working to shorten it through in-house development of key components and standard designs."
Performance diverged by business division. The HS Business Division posted first-quarter revenue of 6.9431 trillion won and operating profit of 569.7 billion won, achieving the highest quarterly revenue. The company said, "Even amid weakened consumer sentiment due to conflicts in the Middle East, we continued revenue growth by expanding online and appliance subscription businesses and maintained solid profitability." It added, "In the second quarter, with demand improvement unlikely due to factors such as U.S. tariff policy and possible delays in rate cuts, we will sustain growth by strengthening product lineups, expanding B2B and subscription businesses, and targeting the Global South."
The VS Business Division recorded its best-ever quarterly performance with first-quarter revenue of 3.0644 trillion won and operating profit of 211.6 billion won. In particular, the operating margin surpassed 6% for the first time, a sign that the profit structure has stabilized.
The MS Business Division recorded revenue of 5.1694 trillion won and operating profit of 371.8 billion won, returning to the black. However, the company said, "On a 2025 basis, revenue declined as demand growth momentum for TVs and other products was lacking and competition intensified, and operating losses occurred as cutthroat competition continued in both premium and entry-level segments." It added, "Although demand events such as the World Cup are slated for this year, geopolitical risks, exchange rates, and cost pressures will persist," adding, "We will focus on securing profitability through expanded production in low-cost countries and improvements in the expense structure, while achieving revenue growth and a turnaround."
Semiconductor supply and price variables were also cited as burdens. LG Electronics said, "With the surge in server demand, semiconductor shortages and rising memory prices continue," adding, "This could increase costs for key products such as TVs, monitors, and PCs." It added, "We are strengthening our response by signing supply MOUs with major partners and dual-sourcing components, while minimizing supply risks through early inventory buildup."
The ES Business Division posted revenue of 2.8223 trillion won and operating profit of 248.5 billion won. The company explained, "Despite weakened consumer sentiment due to Middle East conflicts and rising expenses, we are expanding sales of high-efficiency products such as heat pumps, mainly in North America and Europe."
U.S. tariff policy and supply chain variables were also identified as major risks. LG Electronics said, "While changes in U.S. steel and aluminum tariff policies are expected to increase cost burdens, competitors with production bases in Mexico face the same environment," adding, "We will respond based on product leadership, considering market and competitive conditions."
Meanwhile, regarding the possibility of tariff refunds raised by some, the company said, "After submitting a refund application, procedures proceed through eligibility review and interest calculation, which can typically take 60 to 90 days," adding, "We will share details if there is concrete progress." On logistics costs, it added, "There is upward pressure due to war surcharges, but we will keep them under control within a manageable range by strengthening negotiating power and improving operating efficiency."