LG Electronics posts W1.58tr operating profit in Q2, home appliance margin nears 10%

LG Electronics more than doubled its operating profit year-on-year in the second quarter, driven by strong growth in its home appliance and vehicle component businesses.

The operating profit margin for the home appliance unit approached 10%, while vehicle component sales exceeded 3 trillion won for the second consecutive quarter. The TV business, which had posted a loss of 190 billion won in the second quarter of last year, swung to a profit of around 220 billion won, also contributing to earnings growth.

LG Electronics said Thursday its consolidated sales reached 23.83 trillion won ($16.4 billion) and operating profit reached 1.58 trillion won in the second quarter, up 14.9% and 147%, respectively, from a year earlier.

Business-to-business sales, a key growth driver the company has been cultivating, rose 5% year-on-year to 6.5 trillion won, accounting for 36% of total revenue excluding LG Innotek and underpinning qualitative growth.

The HS Division, which handles home appliances, posted sales of 7.08 trillion won and operating profit of 685.9 billion won, with an operating margin of 9.7%. A two-track strategy targeting both the premium and volume segments proved effective. In addition, a refund of tariffs paid on US exports last year helped push operating profit up 47% from a year earlier.

In the third quarter, with short-term demand stagnation expected, the division plans to expand into Global South markets to secure stable profitability.

The MS Division, which oversees the TV business, recorded sales of 5.11 trillion won and operating profit of 219.4 billion won. Growth in premium TV sales, combined with fixed-cost reductions and a focus on operational efficiency, drove the unit's return to profitability.

In the third quarter, the division plans to maintain its focus on operational efficiency while pursuing growth in premium products and the webOS business to sustain profitability.

The VS Division, which oversees the vehicle component business, posted sales of 3.03 trillion won and operating profit of 191.2 billion won. Its operating margin exceeded 6% for the second consecutive quarter. The division expects sales growth in the third quarter, backed by its order backlog, even as a recovery in finished-vehicle demand remains slow.

The ES Division, which handles air conditioning and energy solutions, recorded sales of 2.73 trillion won and operating profit of 235.8 billion won. Sales grew year-on-year on the back of expanded overseas air conditioner sales, and the operating margin held steady at 8.6%.

The prolonged war in the Middle East continues to pose a risk to the air conditioning business, but the division plans to sustain growth by leading with eco-friendly, high-efficiency and region-specific products.

LG Electronics will also continue investing in cooling solutions targeting AI data centers. A coolant distribution unit it recently developed in-house has received Nvidia certification, and the business is showing results at an accelerating pace.

Meanwhile, LG Electronics plans to ramp up its robot actuator business, which is currently in initial production at its Changwon factory. The company intends to pursue orders from prospective customers and build out a mass production system.

Actuators, which replicate the functions of human joints, muscles and nerves, are essential for building more precise robotic arms and hands, making them a critical component for the era of humanoid robots.

The company also plans to open what it describes as the country's largest robotics data factory at its Yangjae R&D campus before the end of the year. Hundreds of "CLOi" robots are currently deployed at the campus for testing and validation.