In a regulatory filing, South Korean tech giant LG Electronics projected a consolidated operating loss of 109.4 billion won ($75.3 million) for Q4 2025. This marks a sharp reversal from the 135.4 billion won profit recorded during the same period in 2024 and represents the company’s first quarterly deficit since the fourth quarter of 2016.
The Dichotomy: Record Sales vs. Operating Loss
While the bottom line took a hit, LG’s top-line growth remained resilient.
- Record Annual Revenue: Full-year sales for 2025 hit a record high of 89.2 trillion won ($61.4 billion), a 1.7% increase year-on-year.
- Q4 Revenue Surge: Quarterly revenue actually grew 4.8% to 23.85 trillion won, outperforming market expectations despite the lack of profitability.
Why did LG fall into the red?
Analysts attribute the loss to three primary factors that converged at the end of the year:
- Restructuring Costs: LG recognized roughly 300 billion won in one-time expenses related to a “voluntary retirement program.” This workforce optimization is intended to reduce fixed-cost burdens starting in 2026.
- Display & TV Slump: The Media Entertainment (TV) division faced a “tsunami” of competition from Chinese rivals like TCL and Hisense, who have aggressively expanded with lower-priced Mini-LED models. This forced LG to spike marketing expenditures to protect its OLED market share.
- Tariff Pressures: The 10% universal tariff imposed by the U.S. on imports, combined with higher tariffs on raw materials like steel and aluminum, squeezed margins in the core home appliance sector.
LG Electronics: Q4 2025 vs. Q4 2024
| Metric | Q4 2024 (Actual) | Q4 2025 (Preliminary) | Change |
| Revenue | 22.76 Trillion Won | 23.85 Trillion Won | +4.8% |
| Operating Profit/Loss | 135.4 Billion Won (Profit) | (109.4 Billion Won) (Loss) | Swing to Red |
| Annual Op. Profit | 3.42 Trillion Won | 2.48 Trillion Won | -27.5% |
The Silver Lining: “Qualitative Growth”
Despite the hardware slump, LG’s pivot toward B2B and platform services is showing success. These “qualitative growth” segments now account for nearly 50% of total revenue.
- Vehicle Solutions (VS): The automotive division is estimated to have achieved record annual revenue and profit, driven by the demand for premium in-vehicle infotainment.
- HVAC & B2B: LG is seeing rapid growth in cooling solutions for AI data centers, which is becoming a core pillar of its B2B portfolio.
- webOS Platform: The software platform, now installed on over 260 million devices, continues to grow at a double-digit rate, providing high-margin recurring revenue.
Outlook for 2026
Company officials and securities analysts expect a swift rebound. By absorbing restructuring costs in late 2025 and relocating production sites to mitigate U.S. tariffs, LG is positioned for improved profitability. Industry forecasts suggest 2026 annual sales could exceed 90 trillion won with operating profits returning to the 3 trillion won range.
