SEOUL – LG Electronics capitalized on a one-time U.S. tariff refund and accelerating demand for AI data center cooling solutions to post a stronger-than-expected second quarter, as Chief Financial Officer Sangtae Kim laid out an ambitious roadmap to win several trillion won in new cooling orders by year-end.

Consolidated sales rose year-over-year to 23.8 trillion won, with operating income climbing to 1.57 trillion won, the company said during its earnings call Tuesday. Net income reached 781.3 billion won. The results were buoyed by a one-time net gain of approximately 300 billion won, which included refunds from previously paid U.S. tariffs that were ruled unlawful by the Supreme Court.

Key Metrics (Q2 2026)Amount (KRW)YoY TrendSales23.8 trillionGrowthOperating Income1.57 trillionImprovementNet Income781.3 billion–Operating Cash Flow2.45 trillion–Free Cash Flow (after capex)Positive–Cash Balance10.69 trillion+1.43Tn QoQ

“Despite subdued consumer sentiment amid ongoing macroeconomic uncertainties and heightened competition, total sales grew driven by strong home appliance sales, a higher mix of premium TVs, and continued growth in automotive electronics,” Kim said.

Segment Snapshots

LG’s four main businesses all contributed to the top line, though profitability was mixed.

SegmentSales (KRW)Operating Income (KRW)Key DriversHome Appliance & Air Solution (HS)7.75 trillion685.9 billionTwo-track strategy, B2B, tariff refundsMedia & Entertainment (MS)5.11 trillion219.4 billionPremium OLED/QNED TVs, webOS growth, World Cup promotionsVehicle Solutions (VS)3.25 trillion191.2 billionInfotainment growth, cost efficiency, Magna diversificationEco Solution (ES)2.72 trillion235.8 billionOverseas AC sales offset by logistics costs

Note: “Others” includes inter-segment eliminations and non-reportable units, bringing total to 23.8 trillion won.

AI Cooling Orders Surge After NVIDIA Certification

The most striking forward-looking narrative was in AI data center cooling, where the company revealed orders exceeded 600 billion won in the first half and is targeting “several trillion won in new orders” by year-end. ES head Dongun Moon Shin said North America is the primary strategic market, with AI infrastructure investments expected to drive new data center IT capacity from 25 gigawatts in 2026 to 70 gigawatts by 2031.

“More than 60% of this capacity is projected to be deployed in North America,” he added, explaining that LG is expanding its customer base across hyperscalers, collocation providers, and channel partners with an integrated cooling portfolio that combines chillers, liquid cooling components, and solutions.

The commercial breakthrough was underscored by the recent certification of certain CDU (coolant distribution unit) models by NVIDIA, a key validation for supplying next-generation AI factories. “We are also collaborating on the development of advanced high-density cooling technologies which are regarded as a key challenge for next-generation AI data centers,” said Seokkyung Pae, head of robotics.

Robotics Push and NVIDIA Collaboration

Following the establishment of a dedicated Robotics Business Center, LG is accelerating the commercialization of actuators – a core component for humanoid robots – with a pilot production line completed at its Changwon site and initial mass production underway. The center is tasked with overseeing the entire value chain, from supply chain to sales, while leveraging group-wide capabilities under the OneLG initiative.

In a joint project with NVIDIA, LG is testing robots for manufacturing environments from proof-of-concept to actual deployment, and developing a robot data factory, foundation models, and simulation platforms. “Both LG and NVIDIA share the understanding that collaboration is necessary across various areas based on our respective core competencies,” Pae said. “A strategic partnership at the platform ecosystem level can certainly be considered in the future.”

On the automotive side, LG Magna has diversified its order book beyond North America, winning multiple EV powertrain projects from European and Asian OEMs in the first half. The Mexico plant now contributes over 40% of total sales, and the Hungary plant is on track for mass production in January 2027.

Tariff Windfall and Buyback Completion

The one-time gain of about 300 billion won – net of one-time expenses – stemmed from the full refund of tariffs previously paid under a U.S. policy deemed unlawful by the Supreme Court. “As the refund process progressed smoothly, LG Electronics received the full amount eligible for refund during the second quarter,” said IR head Wondae Park. He added that the company remains focused on structural improvements, including supply chain optimization, to minimize future tariff-related volatility.

Meanwhile, LG completed its 100 billion won share buyback program ahead of schedule and will cancel the repurchased shares before year-end, a move intended to enhance shareholder value.

Outlook: Logistics Pressures Persist but Demand Opportunities Emerge

Management warned that geopolitical tensions are likely to push ocean freight rates to a peak in the third quarter before easing, with renegotiation efforts with carriers expected to bring rates back toward prior year levels in Q4. Rising raw material costs, including memory components for TVs, are also a headwind.

Yet the company sees resilient demand in emerging markets and AI data center opportunities as counterweights. HS will pursue a two-track strategy of premium and entry-level products while expanding in the Global South. MS aims to maintain a meaningful full-year operating profit despite a slight decline in TV demand after the pull-forward of sports events. ES will lean on subscription and online sales to improve Korean profitability.

“Facing a major market inflection point known as physical AI, we believe collaboration is necessary across various areas,” Pae said, underscoring that strategic partnerships – potentially including a platform ecosystem play – are on the table.

As the call ended, the message was clear: LG is pivoting aggressively toward high-growth physical AI and cooling infrastructure, even as it navigates a choppy consumer environment.