By Kwanwoo Jun
LG Electronics expects to post a quarterly operating loss for the first time in nine years, hampered by a sluggish recovery in demand for televisions and other electronics amid intensified competition.
The South Korean consumer-electronics giant is also wrestling with higher tariffs and increased restructuring costs while it works to accelerate new business growth.
The company said in a preliminary earnings report Friday that it likely swung to a fourth-quarter operating loss of 109.40 billion won, equivalent to $75.3 million, from an operating profit of 135.40 billion won a year earlier. That would be its first quarterly loss since the final quarter of 2016. Analysts polled by FactSet had expected an operating profit of 7.86 billion won for the final quarter of 2025.
Despite suffering an operating loss, LG Electronics said revenue is expected to grow by 4.8% to 23.854 trillion won for the quarter. It attributed the loss largely to weak performance in its television and display-related segment.
"This was primarily due to a slower-than-expected recovery in display-related demand and intensifying competition, which led to higher marketing expenditures," the company said in a statement.
LG said it also recognized one-off restructuring costs in the second half of 2025 related to early retirement programs for employees, which analysts say likely weighed on earnings.
For the full year, revenue likely increased 1.7% to a record 89.203 trillion won, while operating profit is estimated to have slumped 28% to 2.478 trillion won, the company said.
Shares of LG Electronics have declined about 2% this year after gaining 10% in 2025, underperforming the benchmark Kospi index, which has risen more than 8% in 2026 after surging 76% last year.
The electronics maker remains affected by President Trump's higher levies despite a U.S.-South Korea trade agreement that lowered tariffs on most Korean goods to 15% from 25% from November, as the U.S. maintains a 50% duty on steel and aluminum, key materials in many LG products including home appliances.
The tough trade environment recently prompted the company to launch a corporate restructuring, starting with its TV division, while stepping up expansion into new business-to-business areas such as auto components as well as heating, ventilation and air-conditioning services.
LG is also expanding into nonhardware platform businesses such as appliance subscriptions and online services.
Chief Executive Lyu Jae-chul told a press briefing at the Consumer Electronics Show in Las Vegas earlier this week that he plans to raise investment in new businesses to accelerate future growth, according to the company.
Lyu said LG would use some of the $1.3 billion in proceeds from its Indian subsidiary's initial public offering in October to help fund the future-growth investments, which are projected to increase by more than 40% this year.
The company is scheduled to release its full quarterly results later this month.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
01-08-26 2328ET
