LG Electronics estimates new high in Q1 sales on growth in air conditioning

LG's flag waves in front of LG Electronics' headquarters on Yeouido, Seoul, Monday. YonhapLG's flag waves in front of LG Electronics' headquarters on Yeouido, Seoul, Monday. Yonhap

LG Electronics forecast Monday that its sales for the first quarter of this year will reach 22.75 trillion won ($15.53 billion won), estimating that it will set a new high in its first-quarter revenue on the back of solid growth in its heating, ventilation and air conditioning (HVAC) business.

In its earnings guidance, LG Electronics estimated sales of 22.75 trillion won and an operating profit of 1.26 trillion won for the January to March period. Sales increased by 7.8 percent year-on-year while operating profit declined by 5.7 percent year-on-year.

It is the largest first-quarter revenue, surpassing the previous high of 21.1 trillion won in the first quarter of 2024.

The estimation stands in line with brokerages’ consensus that the company’s operating profit will likely close in on 1.25 trillion won.

Since it is an earnings guidance, which discloses a company’s expected financial performance for an upcoming period, LG Electronics did not reveal breakdowns into its business segment.

However, the company said in a statement that the company’s core businesses of home appliance showed a stable performance despite the economic downturn, and growths in its business-to-business (B2B) operations boosted the company to achieve the record-high quarterly sales.

LG Electronics’ B2B business is spearheaded by HVAC business, which supplies air conditioning solutions to large commercial buildings. The company noted that the earnings from HVAC business is projected to surpass its performance from the same period last year, when it posted 2.59 trillion won in revenue and 335.6 billion won in operating profit.

In the commercial HVAC segment, LG Electronics is securing large-scale orders globally by offering localized solutions tailored to climate, architecture, and living patterns. It recently supplied HVAC system for a 59,800 square-meter logistics center in Singapore.

It is also expanding its large-scale chiller lineups for use in energy industries and artificial intelligence (AI) data centers, while upgrading air conditioners for residential use with AI functions.

“LG Electronics is believed to have outperformed market consensus largely due to better-than-expected performance in its home appliance segment, as well as solid growth in its vehicle component and HVAC businesses,” Hana Securities analyst Kim Rok-ho said. “Both the vehicle components and HVAC divisions are estimated to have exceeded revenue expectations, contributing to stronger overall profitability.”