LG Electronics’ Operating Profit Jumps 147% in Second Quarter
The numbers landed on trading desks before the Seoul market opened Tuesday, and they were the kind LG Electronics executives had waited through two sluggish years to post. Consolidated revenue for the April-to-June quarter reached 23.83 trillion won, up 14.9% from a year earlier. Operating profit climbed 146.9% to 1.58 trillion won, clearing the consensus forecasts of analysts who cover the South Korean appliance and television maker.
The year-over-year surge concealed a quieter sequential picture. Revenue rose 0.4% from the first three months of the year, and operating profit slipped 5.7% quarter over quarter. Analysts said the dip reflected heavier marketing spending in North America and Europe, where appliance makers have fought for share through two years of uneven demand.
The jump pushed LG’s operating margin to about 6.6% of sales, its highest level in several quarters. The gain came from the company’s core businesses rather than one-off items, analysts said. LG’s home-appliance unit, its largest division, drew steady demand for premium products such as built-in kitchens and high-capacity laundry systems, while the home-entertainment business benefited from sales of high-end televisions.
The vehicle-components arm, which supplies parts to global automakers, also contributed, though analysts said growth there has cooled as carmakers trim their electric-vehicle plans. Currency worked in LG’s favor as well: the won’s level against the dollar and euro through the quarter made Korean exports cheaper and lifted the value of overseas earnings when converted back home.
The report arrived a day after Samsung Electronics, LG’s far larger compatriot, released preliminary results that also beat expectations. Samsung’s shares fell anyway, as investors banked profits after a run driven by artificial-intelligence chip demand. LG’s stock had not enjoyed the same AI glow, and the earnings gave it a firmer footing, traders in Seoul said.
For the rest of the year, the question is whether demand can hold. Appliance sales in the United States have been propped up by housing turnover and replacement cycles, while European consumers remain cautious. Analysts said LG’s second-half results will hinge on the autumn launch season and on whether component costs, which fell through the first half, stay low.
LG has also leaned into the business of selling appliances that talk to each other. Its ThinQ platform, which connects washers, refrigerators and air conditioners to the internet, has become a selling point in markets where smart-home adoption is spreading. Analysts said the push into AI-enabled appliances could support premium pricing even if unit growth stays modest.
The strategy matters because LG competes in categories where Chinese rivals have been pressing hard. Midea and Haier, the two largest appliance makers by volume, have expanded into LG’s home market of South Korea and into the premium segment in Europe and North America. LG has answered with features, service networks and brand marketing rather than price cuts, a posture that protects margins but requires volume growth to keep factories busy.
Televisions tell a similar story. LG has defended its position in high-end panels, where OLED screens command premium prices, even as Chinese panel makers have flooded the mid-market with cheaper liquid-crystal displays. The strategy has kept the TV business profitable but has not restored the unit volumes the company enjoyed a decade ago.
Investors will study the full earnings release later this month for segment details and any change in guidance. The preliminary figures cover the group’s consolidated results and do not break out individual divisions. Analysts said they will look for signs that the operating margin can hold above 6% in the second half, a level LG has struggled to sustain in recent years.
The broader picture for Korean consumer-electronics makers is improving, analysts said. The component shortages that squeezed margins during the pandemic era have given way to oversupply in some parts, which favors assemblers. At the same time, the won’s swings have made forecasting harder for exporters, and executives at Korean companies have grown used to hedging currency exposure quarter by quarter.
LG’s other businesses add ballast to the consumer lines. The company’s B2B operations, which sell heating and cooling systems, commercial displays and automotive components, have grown into a steady share of revenue and cushion the swings of consumer electronics. The mix matters for valuation: analysts who follow the stock have long treated LG as a sum of parts, with the appliance business carrying most of the weight and the newer units providing optionality.
The company has also been buying back stock and paying steady dividends, a capital-return program that has won over investors who once saw Korean conglomerates as slow to share profits. Executives have signaled that discipline will continue, and the second-quarter profit jump gives them room to keep the promise. For a company that spent years trading at a discount to global peers, the combination of higher margins and returning cash is the story investors want to hear.
LG’s second-quarter performance suggests the company has found a footing after a difficult stretch. Whether it can convert that into a full year of growth depends on the autumn selling season and on consumer confidence in its biggest markets. For now, executives can point to a number that ends the first half on a high note: operating profit up nearly 150% from a year ago. The full report, due in the coming weeks, will show whether the momentum is built on pricing power, cost discipline, or both.
