Seoul: LG Electronics Inc. announced on Friday that it experienced an operating loss in the fourth quarter, a shift from its performance a year earlier, primarily due to a contraction in demand influenced by U.S. tariffs. The company reported an operating loss of 109.4 billion won (US$75.2 million) for the October-December period, contrasting with a profit of 135.4 billion won in the same quarter the previous year, as stated in a regulatory filing.
According to Yonhap News Agency, the company's fourth-quarter performance fell short of Yonhap Infomax's expectation of an operating profit of 20.5 billion won. Despite the operating loss, LG Electronics saw a 4.8 percent increase in revenue compared to the previous year, reaching 23.85 trillion won. However, the net income data was not disclosed.
For the entire year of 2025, LG Electronics projected an operating profit of 2.47 trillion won, marking a decrease of 27.5 percent from the prior year. Nonetheless, annual revenue showed a modest increase of 1.7 percent, totaling 89.2 trillion won. The net profit figures remain undisclosed, with the company planning to release a comprehensive earnings report later this month.
Kou Sun-young, an analyst at Yuanta Securities Korea Co., attributed the weak earnings to increased market competition and a demand contraction. Kou explained, "The tariff issue with the United States has begun to materialize, and the company incurred a one-off cost following its voluntary retirement program."
Despite the challenges, Kou expressed optimism for LG Electronics' future, indicating potential for improved earnings in 2026. This outlook is supported by the company's expansion in India, highlighted by the debut of LG Electronics India Ltd. on the Indian stock market last year, as the company seeks to diversify its portfolio beyond China. Kou noted that the impact of the voluntary retirement program was completed by the fourth quarter of 2025, leading to reduced fixed expenditures in 2026.