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LG Electronics projects record Q1 revenue

Published: 07 Apr. 2025, 17:33 Updated: 07 Apr. 2025, 21:28

Pictured is LG Electronics' heaquarters in Yeouido, western Seoul, on April 7. [YONHAP]

LG Electronics on Monday projected its Q1 revenue to be its highest ever, buoyed by growth in business-to-business transactions and subscription-based services, despite the period being a typically slow season for home appliances.

The company estimated to have made 22.74 trillion won ($15.5 billion) in consolidated revenue and 1.26 trillion won in operating profit for the period in an earnings guidance released Monday. If confirmed, it would mark a 7.8 percent increase in revenue from the same quarter a year earlier, when it posted 21.10 trillion won. Operating profit, however, is expected to decline 5.7 percent year-on-year. LG Electronics attributed the drop to increased fixed costs.

While the company did not release detailed figures by division, analysts pointed to strong performance in the heating, ventilation and air conditioning (HVAC) business as a key contributor. LG launched the Energy Solution Business Division in late 2023 to oversee HVAC operations, and has since secured major commercial air conditioning contracts in markets such as Singapore by offering locally tailored solutions.

“We are strengthening profitability by operating HVAC as an independent unit, aligned with the nature of order-based business and customer needs,” LG said.

The company's subscription service business also grew in the first quarter. LG said. It plans to broaden its subscription-focused product lineup and enhance its aftercare services this year, while also eyeing international expansion for its subscription model.

The company is reinforcing its presence in the premium market for consumer appliances. Its vehicle component solutions division, meanwhile, is focusing on high-margin infotainment systems and diversifying its business model through platforms for in-car content.

The effects of tariffs imposed under U.S. President Donald Trump were not reflected in the first-quarter results. Analysts suggest the second quarter will be critical in determining LG’s performance, as the impact of tariff hikes begins to take hold.

“The second quarter is the most important period for LG Electronics this year. Given the pressure on profitability, raising prices to absorb tariffs is inevitable; the company will need to defend earnings with a pricing strategy that minimizes the impact on sales volume,” said Park Sang-hyun, an analyst at Korea Investment & Securities.

Attention now turns to Samsung Electronics, which is set to release its earnings estimates on Tuesday. According to financial data tracker FnGuide, the consensus estimate for Samsung’s first-quarter operating profit stands at 5.11 trillion won, around 23 percent less from a year earlier. Analysts cite intensified competition in TVs and appliances, weakening display margins for display and continued underperformance in the semiconductor division as key headwinds.

While Samsung’s memory chip business may have turned a modest profit in the first quarter, the company's Device Solutions division is expected to post an overall operating loss, largely due to heavy losses in system LSI and foundry operations. Yet analysts still believe the first quarter may mark the firm’s bottom, with earnings expected to improve from the second quarter onward as industry conditions recover.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY PARK HAE-LEE [[email protected]]