LG Electronics announced on the 24th that it recorded a consolidated revenue of 22.7398 trillion won and an operating profit of 1.2591 trillion won in the first quarter of this year. The 'pull-in' effect in preparation for tariffs imposed by Trump and significant revenue increases in the business-to-business (B2B) sector led to the highest-ever first-quarter revenue.
Operating profit decreased by 5.7% compared to the same period last year, resulting in a disappointing performance in terms of profitability. This figure is also below the brokerage firms' forecast of around 1.3 trillion won in operating profit. However, there are evaluations noting that the company has maintained over 1 trillion won in operating profit for six consecutive years in the first quarter.
On this day, LG Electronics reported that its new growth engines and core B2B sectors, the vehicle components and heating, ventilation, and air conditioning (HVAC) businesses together achieved record quarterly revenue and operating profit, marking the highest revenue in the first quarter. Notably, the combined operating profit for the VS Division and the ES Division responsible for these sectors increased by 37.2% compared to the previous year, while revenue growth exceeded double digits at 12.3%.
The HS Division, which plays a key role as the cash cow and main business, also achieved record revenue amid maintaining world-class competitive strength, accelerating shifts in business models and methods such as subscriptions and direct-to-consumer (D2C) sales. In the media entertainment sector, the webOS-based advertising and content business continued to show solid growth.
Looking at each business division, the HS Division, responsible for home appliances, recorded first-quarter revenue of 6.6968 trillion won and operating profit of 644.6 billion won. Revenue increased by 9.3% compared to the same period last year, setting a new record. Operating profit rose by 9.9%.
The MS Division, responsible for TV and display businesses, recorded first-quarter revenue of 4.9503 trillion won and operating profit of 4.9 billion won. Although TV demand remains stagnant, the webOS-based advertising and content business is steadily growing, enhancing its contribution to management performance. The division's revenue remained at last year's level, while operating profit was impacted by rising LCD panel prices and increased marketing costs.
The VS Division, which oversees vehicle components, achieved record results for both revenue and operating profit across all previous quarters. The first-quarter revenue for the VS Division was 2.8432 trillion won, with an operating profit of 125.1 billion won. Growth continues based on a backlog of orders reaching 100 trillion won. Notably, the vehicle infotainment (IVI) business has expanded the share of premium product sales, increasing its contribution to profitability.
The ES Division also recorded the highest revenue and operating profit for the quarter. First-quarter revenue reached 3.0544 trillion won, while operating profit was 406.7 billion won, achieving an operating profit margin of 13.3%. Revenue increased by 18.0%, and operating profit rose by 21.2% compared to the same period last year. A spokesperson from LG Electronics noted, "Since the beginning of the year, we have been operating the HVAC business as an independent division, improving resource input efficiency and establishing a B2B-compatible enterprise structure, which has become visible in management performance."
Meanwhile, industry insiders concur that the 'main game' for LG Electronics' performance this year begins in the second quarter. They explain that the performance in the second quarter, when the tariffs imposed by Trump become fully effective, will serve as a test of LG Electronics' ability to respond to tariffs.
During the first-quarter earnings conference call held on this day, LG Electronics stated, "As part of our production optimization strategy, we are maximizing the use of production locations in Mexico and the United States that can avoid tariff increases and are also reviewing the possibility of raising selling prices to a certain extent through distribution channels." They added, "In the case of our factory in Tennessee, we plan to expand production volumes of washing machines and can cover up to the late 10% of sales directed to the U.S. from our local factory."