LG Electronics' Q2 net income drops 3.1 pc on rising costs
In a regulatory filing, the company posted a net profit of 609.7 billion won (US$442.5 million) for the April-June period, down 3.1 percent from a year earlier, reports Yonhap news agency.
Its operating profit plunged 46.6 percent on-year to 639.4 billion won, and revenue decreased 4.4 percent to 20.73 trillion won.
The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 173.2 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
LG Electronics attributed the better-than-expected net profit to equity gains from affiliates.
However, the company noted that waning demand in major markets and external challenges, including U.S. tariff uncertainties and intensifying competition, weighed heavily on its operating profit and sales.
Rising costs, including logistics expenses, also affected overall profitability compared with the same period last year.
Among its divisions, the home appliance and business-to-business (B2B) segments, including vehicle components, and heating, ventilation and air conditioning (HVAC), delivered solid performances in the second quarter.
The company's conventional home appliance business posted sales of 6.6 trillion won and an operating profit of 439.9 billion won.
The vehicle component division, one of LG Electronics' key growth drivers, earned a record 2.85 trillion won in sales and 126.2 billion won in operating profit.
The HVAC division reported 2.64 trillion won in sales and 250.5 billion won in operating profit.
LG Electronics emphasized that its B2B segments are relatively resilient to market volatility. Combined sales from the vehicle component and HVAC units rose 3 percent on-year to 6.2 trillion won in the second quarter.
Looking ahead, LG Electronics said the global home appliance market is expected to face slow recovery amid intensified competition. The company aims to protect profitability by expanding its subscription-based services for stable revenue.
In B2B, it plans to maintain strong partnerships with key clients and respond flexibly to seasonal demand.
Shares of LG Electronics fell 1.03 percent to close at 77,100 on the main bourse, far underperforming the broader Korea Composite Stock Price Index (KOSPI), which closed 0.18 percent higher.
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