[News Space=Reporter seungwon lee] LG Group's two mainstays, LG Electronics and LG Energy Solution, both reported operating losses for the fourth quarter of 2025, falling into the red simultaneously. LG Electronics recorded an operating loss of KRW 109.4 billion, its first quarterly loss in nine years since the fourth quarter of 2016, due to sluggish display demand, increased marketing expenses, and one-time voluntary retirement expenses. Sales for the same period were KRW 23.85 trillion, up 4.8% year-on-year.

Annual performance comparison

LG Electronics achieved a record-high annual sales of 89.2025 trillion won in 2025, but operating profit fell 27.5% year-on-year to 2.478 trillion won. The company estimated voluntary retirement costs at around 300 billion won, and explained that the burden of US tariffs was largely offset by improved production efficiency.

LG Energy Solution recorded an operating loss of KRW 122 billion in the fourth quarter (a 45.9% decrease from KRW 225.5 billion in the same period last year). However, excluding the KRW 332.8 billion Advanced Manufacturing Production Tax Credit (AMPC) from the U.S. IRA, the loss widened to KRW 454.8 billion.

Deficit Factor Analysis

LG Electronics' losses are attributed to a combination of factors: a delayed recovery in TV and home appliance demand, rising marketing and logistics costs due to intensifying competition, and personnel restructuring costs in the second half of the year. Analysts estimate losses of 55 billion won for the home appliance division and 330 billion won for the TV division.

LG Energy Solution was hit by the electric vehicle (EV) chasm, inventory adjustments at North American customers, and a decline in pouch-type battery volume due to the end of US EV subsidies. However, it achieved a 7.7% quarter-on-quarter increase in sales (KRW 6.1415 trillion) thanks to expanded North American ESS production and the supply of new cylindrical EV models.

On an annual basis, LG Energy Solution saw a significant improvement in operating profit thanks to the AMPC effect, but sales declined due to slowing EV demand.

Future strategy

LG Electronics seeks to restore profitability by strengthening its platform, expanding its lifestyle TV lineup, and targeting the global South market. LG Energy Solution will respond to policy changes by leveraging its North American ESS capabilities and diversifying its EV/ESS portfolio. Both companies plan to minimize tariff and demand risks this year by reducing fixed costs and improving operational efficiency.