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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] G Electronics delivered record first-quarter results despite economic uncertainty, but concerns over the rest of the year dominated its earnings call.
The company reported consolidated revenue of KRW 23.73 trillion and operating profit of KRW 1.67 trillion for Q1, up 4.3% and 32.9% year-on-year, respectively—well above market expectations.
Despite the strong performance, analysts raised concerns over multiple headwinds that could weigh on second-half earnings, including prolonged Middle East tensions, rising logistics costs, U.S. tariffs, and semiconductor supply constraints.
Regarding logistics, LG Electronics said Middle East-bound shipments account for only about 5% of total volume, limiting direct disruption. However, it acknowledged rising costs, noting that war-related surcharges and fuel costs could push overall shipping expenses up by more than 10% versus initial expectations. The company plans to mitigate the impact through increased local sourcing, optimized shipping routes, and cost-efficient carrier selection.
U.S. trade policy is another key variable. The company said recent tariff changes under the administration of Donald Trump—including a shift to 25% tariffs on steel and aluminum-based finished goods—are expected to increase cost burdens. However, LG noted that competitors with production bases in Mexico face similar challenges.
LG Electronics emphasized it will continue strengthening higher-quality growth drivers such as subscription-based services and platform businesses to navigate ongoing uncertainties.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
