By Kwanwoo Jun
LG Electronics fell into the red after three profitable quarters, ending 2025 on a weak note amid sluggish demand recovery and rising business costs.
The consumer-electronics giant's television business--once among the market leaders--has been facing a notable decline, grappling with a range of challenges, from weak demand and intense competition to higher marketing and labor costs.
Costly restructuring efforts, including an early retirement program for employees, also weighed on the bottom line.
The South Korean company on Friday posted a net loss of 725.90 billion won, equivalent to $507.0 million, in the fourth quarter, worse than the 503.50 billion won loss analysts expected in a FactSet consensus.
That was its first net loss since the final quarter of 2024. LG Electronics had earlier guided for its first operating loss in nine years despite higher revenue for the fourth quarter.
Revenue rose 4.8% from a year earlier to 23.852 trillion won, and operating loss was 109.00 billion won, both largely in line with its preliminary estimates.
The company's media entertainment solution division, which includes TVs and displays, posted an annual operating loss of 750.90 billion won, while its home-appliance, auto-component and business-to-business units remained profitable.
For the full year, net profit doubled to 1.220 trillion won following a plunge in 2024. Revenue increased 1.7% to 89.201 trillion won, with operating profit down 28% at 2.478 trillion won.
On an earnings call, LG management said that sporting events such as the Winter Olympics and the World Cup could support demand in 2026. However, macroeconomic uncertainty, semiconductor shortages and higher component costs are expected to cap growth and leave demand marginally higher or flat from the previous year, they said.
The company reaffirmed commitments to step up expansion into new business-to-business areas as well as nonhardware platform businesses, including appliance subscriptions and online services.
Analyst Junseo Park of Mirae Asset Securities said LG's earnings could improve gradually from the first half of 2026 as the company realigns its production and sales bases, diversifies component sourcing, and optimizes logistics and inventory across its global supply chains.
Park was also positive about LG showcasing its in-house robotics capabilities at the U.S. CES trade show earlier this month. The company's data-center cooling system business stands to benefit from expanding artificial-intelligence infrastructure, which should support its medium- to long-term growth momentum, he said in a note ahead of the earnings release.
Shares in LG Electronics ended 1.8% lower before the results. The stock has risen 7.8% this year, underperforming the benchmark Kospi index's 24% gain.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
01-30-26 0559ET
