🌰 LG Electronics: Profits rose, but home appliance profitability remains under pressure - 2026.10.29

Hi, I’m Acorn 🌰 Today, I want to unpack an interesting tug-of-war hiding in LG Electronics’ Q3 figures. Profits are up, but the picture looks a little different when you look beneath the surface.

Let’s start with the big picture 📊

First, looking at the headline figures, LG Electronics’ Q3 operating profit came to 781,900,000,000 KRW, up 13.5% from the same period last year ^[1]. A video report cited the same figure, so multiple sources line up on this point ^[1]. Cumulative operating profit through Q3 also reportedly topped 4,000,000,000,000 KRW for the first time ^[3]. NewsQuest noted that the growth rate stood out, but that the “strong first half, weak second half” pattern was painful ^[2]. Put simply, momentum faded as the year went on. A troubling figure sits alongside the good ones.

Cooling equipment: this connection is key ⚙️

This connection is key. AI semiconductors generate a lot of heat, and data centers need cooling equipment to keep that heat under control and operate reliably. Money Today reported that LG Electronics plans to expand its cooling equipment production capacity tenfold ^[4]. The Seoul Shinmun said AI cooling orders had exceeded 3,000,000,000,000 KRW ^[3]. So the next question is whether the gears will mesh: orders turning into production, and then showing up in earnings. Looking one step further, if we rank the value chain by tier, cooling equipment comes first, with expanded production capacity at its center. However, production expansion announcements and actual revenue can be separated by a time lag, so it’s too early to treat them as the same thing. Hmm, that’s something to check next quarter.

Home appliances are selling, but costs are holding them back 💸

There’s another side to the story. An analysis of the same Q3 results found that although overall operating profit rose, profitability in the home appliance and HVAC businesses actually worsened ^[5]. Home appliance sales increased, but higher logistics and marketing costs pushed operating profit down ^[5]. When costs surge ahead, the impact feels very different, even if sales are growing. It’s like a machine whose gears are turning smoothly while the cost of oiling them keeps climbing. In value-chain terms, the second priority is defending profitability in home appliances and HVAC. The key question is whether the recovery in home appliance sales will be strong enough to outweigh the cost burden.

Brokerage views and remaining variables 🔍

The news is that SK Securities raised its target price for LG Electronics. The stated rationale was that revenue from its new data center business is gaining momentum ^[6]. This is SK Securities’ view, not a plan confirmed by the company. As for the stock, it closed at ₩162,600 on October 28, then fell to ₩155,000 on October 29, recording a -4.14% change. Trading volume was 1,022,686. It’s difficult to say for certain how the news and share price movements were connected that day, so it seems best to view them side by side. Acorn thinks it remains an open question whether cooling orders can translate into production and revenue figures. The remaining variables are whether that link will become visible in Q4 and how much the cost burden on the home appliance side will ease. Which do you think will show up in the numbers first? 🤔

📰 Reference News (6)

1

LG Electronics Q3 operating profit reaches 781.9 billion… up 13.5%

네이버뉴스 · 2026.10.29

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2

“Growth stood out, but the ‘strong first half, weak second half’ pattern was painful… The bright and dark sides of LG Electronics’ Q3 results” - NewsQuest

네이버뉴스 · 2026.10.29

📰 View original

5

Home appliance sales and AI cooling orders rise, but… LG Electronics’ profitability hit by cost pressures

네이버뉴스 · 2026.10.29

📰 View original