Samsung Electronics and LG Electronics reported similar sales in their TV and home appliance businesses for the second quarter of this year, but their profitability showed a significant difference. While LG's profits were bolstered by its B2B, subscription, and heating and cooling businesses, Samsung faced a loss due to rising component costs.
According to industry sources on August 2, LG Electronics' home appliance (HS), media entertainment (MS), and eco-solution (ES) divisions combined for a second-quarter revenue of 14.9164 trillion won, with an operating profit of 1.1411 trillion won.
In contrast, Samsung Electronics' visual display (VD) and digital appliance (DA) divisions reported revenue of 14.5 trillion won, an increase of 200 billion won from the previous quarter. However, the company recorded an operating loss of 10 billion won, reversing from a profit of 200 billion won in the first quarter.
The revenue difference between the two companies was 4.164 trillion won, while the operating profit gap widened to approximately 1.15 trillion won.
It is important to note that the scope of business for both companies is not entirely the same. LG's results include the ES division, which handles data center cooling and commercial air conditioning. Samsung's VD and DA results also encompass its health and medical device business, making direct comparisons challenging.
LG's profitability was supported by increased sales of premium home appliances and TVs, along with growth in its B2B and subscription businesses. Improvements in quality, cost, and supply chain management also contributed positively.
In the second quarter, LG's B2B revenue rose 5% year-on-year to 6.5 trillion won, while its subscription business revenue also increased by 5% to 660 billion won. The order amount for AI data center cooling solutions exceeded 600 billion won in the first half of the year.
After incurring losses last year due to voluntary retirement costs, LG's TV business returned to profitability, driven by sales of high-value products like OLED and QNED, as well as its webOS-based platform.
Samsung defended its revenue by increasing sales of premium TVs and AI appliances. Seasonal demand for air conditioners and heightened TV sales due to major sporting events also contributed to its revenue growth.
However, rising prices for key components, including memory, and increased business costs prevented revenue growth from translating into profits. The company also faced costs related to streamlining its production and sales operations, including the restructuring of some home appliance and TV businesses in China.
For the second quarter, the operating profit margin for the respective businesses was approximately 7.7% for LG and -0.1% for Samsung.
Looking ahead, Samsung's DX division aims to recover profitability in the second half of the year by expanding sales of the Galaxy Z8 series and premium products. The VD division plans to grow its Samsung TV Plus and advertising and operating system licensing businesses, while the DA division intends to expand its HVAC business, including heat pumps and central air conditioning.
Samsung will also continue its investments in robotics and artificial intelligence. The company has established a new robotics organization under its CEO to promote the transition to AI-driven autonomous factories and the development of next-generation form factors. The DX division's revenue for the first half of the year reached 100.7 trillion won, surpassing the 100 trillion won mark for the first time.
* This article has been translated by AI.
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