[K-Tech] LG key wings' 2Q performance fall short of expectations

LG Electronics’ headquarters the LG Digital Twin Tower in Yeouido Seoul Courtesy of LG Electronics — LG Electronics’ headquarters, the LG Digital Twin Tower in Yeouido, Seoul / Courtesy of LG Electronics

SEOUL, July 30 (AJP) - LG Electronics, LG Display, and LG Innotek, the core electronics wings of South Korea’s LG Group, posted underwhelming second-quarter results, falling short of market expectations amid headwinds including U.S. tariffs, high logistics costs, and exchange rate fluctuations. However, industry analysts anticipate a rebound in the second half, aided by seasonal demand in the IT sector and a product cycle led by Apple.

According to industry data released Tuesday, LG Electronics, the largest of the three, reported 20.7352 trillion won (approximately $14.93 billion) in revenue and 639.4 billion won (approximately $460 million) in operating profit for the second quarter. Revenue declined 4.4 percent year-on-year, while operating profit plunged 46.6 percent. The company cited weakening demand in key markets, heightened tariff burdens from shifting U.S. trade policy, and intensified global competition as overlapping challenges weighing on earnings.

LG Display widened its operating loss to 116 billion won ($83.5 million) from 93.7 billion won ($67.5 million) a year earlier, with revenue falling nearly 20 percent over the same period. The company attributed the decline to lower mobile shipments and its strategic exit from the LCD TV business as it pivots toward OLED-centered operations. The depreciation of the U.S. dollar against the Korean won also negatively affected earnings.

LG Innotek also underperformed significantly. Its second-quarter operating profit dropped 92.5 percent year-on-year to just 11.4 billion won ($8.2 million), well below market forecasts.

Looking ahead, LG Electronics is expected to continue facing pressure in the second half, as tariffs on home appliances take full effect and macro uncertainties persist. In contrast, LG Display and LG Innotek may benefit from a rebound in IT demand as smartphone and other device launches pick up pace.

An analyst at Shinhan Investment Corp. projected that LG Display’s mobile segment will grow 69.9 percent quarter-over-quarter in Q3, driven by ramped-up production capacity and improved technological competitiveness that is expected to translate into greater customer share.

With Apple ramping up production of the iPhone 17 and new iPad Pro models from July, LG Display’s OLED market share is forecast to exceed 30 percent. Market research firm UBI Research stated, "The increase in OLED panel shipments for iPhones and iPads will drive a performance rebound," projecting Q3 shipments of 18.5 million iPhone panels, up nearly 70 percent from the previous quarter, and 1.6 million iPad panels, double the previous volume.

LG Display is expected to see robust gains across its OLED business in the second half. "Achieving our full-year profitability goal is within reach," said Kim Sung-hyun, Chief Financial Officer at LG Display.

LG Innotek, meanwhile, is eyeing a recovery in camera module demand fueled by Apple’s upcoming product launches. Growth is also expected from previously secured orders for high-value vehicle components such as telecom and lighting systems as well as steady demand for RF-SiP (Radio Frequency-System in Package) semiconductor substrates used in communications.

Lim Jaeho ajupresswogh@ajupress.com