LG Electronics (066570) Q1 2026 earnings summary

Executive summary

• Consolidated Q1 2026 sales reached KRW 23.7 trillion, with operating income of KRW 1.67 trillion, both up year-over-year despite geopolitical risks and rising raw material costs.

• Growth was driven by peak appliance season, increased TV demand from sporting events, back-to-school PC demand, and stable automotive electronics orders.

• HS and VS segments achieved record high quarterly sales, with VS also posting record operating income.

• New growth businesses in robotics and AI data center cooling are progressing, with POC validation and mass production of key components underway.

• Share buyback program is ongoing, with 50% of the KRW 100 billion repurchase completed.

Financial highlights

• Q1 2026 sales: KRW 23,727.2 billion, up 4.3% YoY; operating profit: KRW 1,673.7 billion, up 32.9% YoY; net income: KRW 1,005.1 billion, up from a net loss in Q4 2025.

• Gross margin improved to 26.0% from 20.3% in Q4 2025.

• Cash flow from operating activities was KRW 1.1 trillion; investing activities at KRW -1.17 trillion; net cash flow at KRW -188.1 billion.

• End of Q1 cash balance stood at KRW 8.63 trillion, down KRW 138.2 billion from the previous quarter.

• Assets: KRW 71.2 trillion; Liabilities: KRW 40.7 trillion; Equity: KRW 30.5 trillion.

Outlook and guidance

• Q2 faces continued pressure from oil price fluctuations, raw material costs, and supply chain disruptions.

• Region-specific strategies and cost competitiveness initiatives are planned to address these challenges.

• HS aims to sustain sales growth by expanding B2B, online, and subscription businesses, and focusing on Global South markets.

• MS expects demand improvement from global sporting events but remains cautious due to macroeconomic volatility.

• VS will focus on high value-added products and ramp up mass production for new projects.