Seoul: LG Electronics Inc., a prominent home appliance manufacturer based in South Korea, reported a significant decline in its third-quarter operating earnings, attributing the decrease to escalating tariff costs. The company's operating profit for the quarter ending in September was estimated at 688.9 billion won (US$482.6 million), marking an 8.4 percent drop compared to the same period last year, as detailed in a regulatory filing.
According to Yonhap News Agency, LG Electronics' revenue also experienced a slight decline, decreasing by 1.4 percent year-on-year to 21.87 trillion won. Although the data for net income was not disclosed, the reported operating profit exceeded market expectations, being 13.9 percent higher than the average estimate from a survey conducted by Yonhap Infomax, the financial data unit of Yonhap News Agency.
The electronics giant pointed to increased tariff burdens, particularly influenced by recent changes in U.S. trade policy, as a primary factor in the decline of its operating profit. Additionally, the company's voluntary retirement program was noted as a contributing factor to the weaker financial performance.
Despite these setbacks, LG Electronics highlighted strong performance in its business-to-business (B2B) operations, notably in electric vehicle (EV) components, which showed solid growth during the quarter. The company's traditional home appliance segment also maintained its market dominance and competitive edge.
Looking ahead, LG Electronics emphasized its commitment to expanding its B2B and subscription-based offerings as part of its strategy to reinforce long-term business fundamentals. The company also anticipates that the upcoming initial public offering (IPO) of its Indian subsidiary will generate capital to support its efforts in reorganizing its business portfolio and identifying future growth opportunities.
The company is set to release its final earnings report in the near future.