LG Electronics posts solid Q2 earnings despite challenging market

LG logo appears at LG Twin Tower in Seoul, Thursday. Yonhap

LG Electronics on Thursday reported an operating profit of 1.58 trillion won ($1.10 billion) and revenue of 23.8 trillion won ($16.56 billion) in the second quarter, both record highs for an April-June period despite persistent challenges in its business environment.

The company said in its regulatory filing that the second-quarter operating profit grew 147 percent from a year earlier, while sales improved 14.9 percent during the same period.

The company attributed the strong performance to the continued growth of its home appliance business, despite unfavorable external conditions such as the conflict in the Middle East. It added that major sporting events and continued growth in its vehicle solutions business also contributed to higher overall sales.

Operating profit more than doubled as the share of high-value-added products increased and cost competitiveness improved across the business, while tariff refunds on exports to the United States made last year were recognized as one-off gains.

A person browses home appliances at an LG Electronics showroom in Seoul, Thursday. Yonhap

Its Home Appliance Solution division posted 7.08 trillion won in sales and 685.9 billion won in operating profit, surpassing the 7 trillion won mark in quarterly revenue for the first time.

LG Electronics said it will cope with expected demand slowdown in the third quarter by focusing on key markets in the Global South, where demand remains relatively solid. It will continue structural improvement efforts to secure profitability, and will begin full-scale operations of its robot actuator business.

TV and vehicle electronic component businesses each delivered solid performances. The Media Entertainment Solution division posted 5.11 trillion won in revenue and 219 billion won in operating profit, while the Vehicle Solution division recorded 3.03 trillion won in revenue and 191 billion won in operating profit.

The Eco Solution division, which oversees the heating, ventilation and air conditioning (HVAC) business, posted 2.73 trillion won in revenue and 235.8 billion won in operating profit. Revenue grew on the back of strong overseas air conditioner sales, and its operating margin stood at 8.6 percent.

The company said it expects to accelerate growth in the third quarter with eco-friendly, high-efficiency and region-specific HVAC solutions. Particularly, the division will continue investments in artificial intelligence (AI) data center cooling system businesses, with its in-house developed coolant distribution system expected to soon join the global AI data center supply chain.