SEOUL – LG Electronics Inc. reported its first quarterly operating loss in nine years for the final three months of 2025, despite achieving record-breaking annual revenue. The company revealed on January 9 that it is pivoting its strategy toward Business-to-Business (B2B) sectors and software platforms to rebound in 2026.
Quarterly Setback vs. Annual Growth
According to the preliminary earnings report, LG Electronics recorded a revenue of 23.85 trillion won and an operating loss of 109.4 billion won for the fourth quarter of 2025. This marks the company's first quarterly deficit since the fourth quarter of 2016. The loss is largely attributed to one-time expenses, including approximately 300 billion won allocated for voluntary retirement programs initiated in August to streamline the TV business division. Additionally, intensifying competition in the stagnant consumer electronics and TV markets led to a sharp increase in marketing expenditures.
Despite the quarterly dip, the company’s annual performance showed remarkable resilience in scale. Total revenue for 2025 reached an all-time high of 89.20 trillion won, a 1.7% increase from the previous year. This growth was sustained even in the face of challenging global trade environments, including rising tariffs in the U.S. market. However, total annual operating profit fell to 2.48 trillion won, marking the second consecutive year of decline since 2023.
Sector Performance: Premium Dominance and Emerging Challenges
The Home Appliance & Air Solution (H&A) division remained the primary driver of revenue, maintaining a strong grip on the premium market while expanding its presence in the "volume zone" (mid-range segment). The Vehicle Component Solutions (VS) business also saw record-breaking figures, benefiting from the premiumization of in-vehicle infotainment systems and improved operational efficiency.
In contrast, the display-related businesses, including TVs and IT devices, faced a grim quarter. Intense competition from cost-effective Chinese manufacturers and sluggish global demand resulted in significant losses. Analysts estimate that the Business Solutions (BS) company suffered an operating loss ranging between 200 billion and 330 billion won due to heavy promotional costs.
2026 Strategy: Accelerating B2B and Future Tech
LG Electronics plans to turn the tide in 2026 by aggressively diversifying its portfolio beyond hardware-centric consumer products. The company is shifting its focus toward non-hardware services, Direct-to-Consumer (D2C) models, and B2B solutions.
A key pillar of this strategy is the expansion of its heating, ventilation, and air conditioning (HVAC) business, specifically targeting global tech giants like NVIDIA and Microsoft for data center cooling solutions. Furthermore, following its announcement at CES 2026, LG is set to enter the humanoid actuator market, leveraging its world-class motor and compressor technologies.
In the TV sector, the company aims for double-digit growth in its webOS platform business by securing high-quality content and expanding its advertising-based services. "The Q4 loss is a temporary phenomenon resulting from structural labor adjustments and seasonal marketing," noted an industry official. "The record revenue proves the brand's fundamental strength. The key for 2026 will be how quickly LG can scale its high-value B2B sectors, such as automotive parts and robotics."
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