LG Electronics has warned it expects to post its first quarterly operating loss in nine years, underscoring mounting pressure on global consumer electronics makers as weak demand, rising costs and intensifying competition squeeze margins.
In a preliminary earnings guidance issued Friday, the South Korean conglomerate said it anticipates an operating loss for the final quarter of 2025, a sharp reversal from years of consistent profitability. While LG did not disclose detailed figures, the company pointed to slowing demand across key markets and continued cost pressures as major headwinds.
The expected loss marks a significant moment for LG, which has largely weathered past downturns through a diversified portfolio spanning home appliances, televisions, vehicle components and business-to-business solutions. Analysts say the latest setback reflects broader structural challenges facing the consumer electronics sector rather than a company-specific shock.
Demand for TVs and home appliances has softened globally as inflation, high interest rates and economic uncertainty weigh on household spending. LG’s TV business, long a flagship segment driven by premium OLED products, has been hit by slower replacement cycles and aggressive price competition, particularly from Chinese manufacturers.
The company’s home appliance division, another core profit driver, has also faced margin pressure from elevated logistics and component costs, despite gradual easing in global supply chains. Currency volatility has further complicated earnings, especially in overseas markets.
LG’s vehicle components business, which supplies infotainment systems and EV-related parts to global automakers, continues to grow but has yet to offset weakness in its traditional consumer-facing segments. The company exited the smartphone business in 2021, a move that initially stabilised finances but also reduced diversification in high-growth consumer tech.
In a statement, LG said it is stepping up cost-efficiency measures, adjusting inventory levels and accelerating its shift toward higher-margin businesses, including commercial solutions, smart home services and automotive electronics. The firm also reiterated its long-term strategy to expand subscription-based appliance services and B2B offerings to reduce reliance on cyclical consumer demand.
Market analysts say the expected loss could raise investor concerns in the short term but does not necessarily signal a prolonged downturn if demand stabilises in 2026.
“This is a reality check for the entire industry,” one Seoul-based analyst said. “Even well-run, diversified players like LG are not immune to prolonged global weakness. The key question is how quickly demand rebounds and whether LG’s structural shift delivers results fast enough.”
LG Electronics’ shares traded cautiously following the announcement, as investors await full earnings details and management guidance on the outlook for the year ahead.
The company is scheduled to release its complete quarterly results later this month, which are expected to provide clearer insight into the scale of the loss and the pace of recovery prospects for 2026.
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