LG Electronics Breaks Sales Record Last Year Despite 4Q Shock (Update)

4Q Operating Profit Decreases 91% to 65.5 Billion KRW
Last Year's Revenue Was 83.4695 Trillion KRW

Reporter Moon Honam munonam@

[Asia Economy Reporter Kim Pyeonghwa] LG Electronics posted its highest-ever performance last year, but its operating profit in the fourth quarter plummeted by 91%, resulting in an earnings shock. Despite the peak season in the electronics industry, profitability declined in its cash cow home appliances and TV businesses, leading to a disappointing performance.

LG Electronics announced on the 6th that its operating profit for the fourth quarter of last year was 65.5 billion KRW, down 91.2% compared to the same period last year. This result was far below the operating profit consensus (average forecast by securities firms) of 420.7 billion KRW as of that day.

Sales in the fourth quarter of last year reached 21.8597 trillion KRW, a 5.2% increase compared to the same period last year. However, sales were also below the consensus forecast of 22.7202 trillion KRW.

Since these results are preliminary, LG Electronics did not disclose performance by business segment. However, it distributed explanatory materials during the preliminary earnings announcement to outline the background of each segment's performance.

In the home appliances business, demand decreased due to worsening macroeconomic conditions such as persistent inflation in major countries, and intensified competition in overseas markets led to a slight decline in sales compared to the same period last year. Profitability remained positive but the profit margin shrank.

The TV business saw a decline in sales compared to the same period last year due to a global decrease in demand and weakened consumer sentiment in Europe caused by geopolitical risks, which slowed sales of premium TVs during the peak season. Profitability also decreased due to increased marketing and sales promotion expenses.

For the full year, LG Electronics broke its previous record for highest sales set in 2021 (73.908 trillion KRW). Last year, LG Electronics recorded sales of 83.4695 trillion KRW, a 12.9% increase compared to the previous year. Operating profit for the year was 3.5472 trillion KRW, down 12.6% from the previous year.