LG Electronics topped 1 trillion won in operating profit on a consolidation basis for a second straight quarter this year. It is the first time in two years that operating profit has come in at the 1 trillion won level for two consecutive quarters, since the first and second quarters of 2024. While a one-off revenue from a U.S. tariff refund was reflected, expanded sales of core businesses such as home appliances and TVs, along with growth in high-margin businesses including webOS, subscriptions, and online, drove profitability improvements.
On the 7th, LG Electronics announced preliminary second-quarter results on a consolidation basis of 23.8297 trillion won in revenue and 1.5788 trillion won in operating profit. Compared with a year earlier, revenue rose 14.9% and operating profit jumped 146.9%. Both revenue and operating profit were the highest ever for a second quarter.
The results are an "earnings surprise" that far exceeded market expectations. The second-quarter consensus for LG Electronics compiled by FnGuide was 22.6184 trillion won in revenue and 1.074 trillion won in operating profit. The preliminarily tallied operating profit beats the consensus by about 47%.
On a first-half basis as well, the company posted record results. LG Electronics' first-half revenue this year came to 47.5569 trillion won and operating profit to 3.2525 trillion won. Those figures are up 9.4% and 71.3%, respectively, from a year earlier. First-half operating profit has already surpassed last year's annual operating profit of 2.4784 trillion won.
Second-quarter revenue this year was largely driven by increased sales of premium products in core businesses such as home appliances and TVs. With the arrival of the seasonal peak, air-conditioner sales grew mainly in overseas markets, and the vehicle components business continued its growth on the back of a strong order backlog and strategic customer partnerships.
Operating profit rose sharply as the leverage effect from higher revenue coincided with improvements in the revenue structure. The company said, "We recognized expenses for a voluntary retirement program carried out in April as part of efforts to streamline our workforce structure," but added, "We minimized the impact on profitability through efforts to improve cost competitiveness across the business and a companywide emergency management system implemented in advance to address uncertainty in the business environment."
LG Electronics has been proceeding with procedures to refund tariffs paid on U.S.-bound shipments last year, and recognized the confirmed refund amount as a one-off revenue this quarter. The company said, "Even excluding the tariff refund amount, second-quarter operating profit increased sharply from a year earlier."
By business, the Home Appliance Solution unit continued its growth with a two-track strategy targeting both premium and volume zones. Business-to-business (B2B) operations, including commercial washers and built-in appliances, are also expanding. The Media Entertainment Solution unit, which oversees the TV business, showed an improving performance trend from a year earlier by rolling out premium TV models such as OLED evo and Micro RGB.
The Vehicle Solution unit secured stable revenue and profitability by responding to growing demand for premium infotainment. The Eco Solution business saw sales increase mainly in overseas markets such as Europe, where a heat wave has persisted. LG Electronics also plans to continue investing to capture opportunities in artificial intelligence (AI) data center cooling solutions.
The preliminary second-quarter results announced this time are estimates based on Korea International Financial Reporting Standards (K-IFRS). LG Electronics plans to announce net profit on a consolidation basis and finalized results by business division at the end of this month.