Corporate Earnings Seen Positive for 4th Quarter
By Park Hyong-ki
Staff Reporter
Hyundai Heavy Industries and other companies benefiting from strong demand from China are expected to lead quarterly earnings growth for firms listed on the main exchange.
Listed companies are projected to post combined operating profits of 14.3 trillion won in the fourth quarter, up 44 percent from a year earlier, FN Guide, an online securities information provider, said, after compiling earnings projections by 215 companies, excluding financial holding firms.
Their combined net profits are expected to rise 26 percent to 13 trillion won, with sales rising 7 percent to 168 trillion won.
``Their quarterly results will be largely in line with market expectations on strong performances by shipbuilders and machinery makers,'' it said.
However, their operating profits are projected to fall 2.1 percent from a quarter earlier, with net profits sliding 6.3 percent. The quarter-on-quarter fall reflects weaker operating profits at Samsung Electronics and other major companies.
Hyundai Heavy Industries' operating profit is expected to grow 57.1 percent from a year earlier in the fourth quarter, with Hyundai Mipo Dockyard's operating profit growth seen at 29.8 percent.
Korea Line Corp. and Hanjin Shipping are forecast to lead in operating profit among shipping companies.
However, compared with a quarter earlier, their profit figures are dismal due to sluggish performances of Samsung Electronics, Hynix Semiconductor and other heavyweights. Samsung and Hynix have been struggling to boost their bottom lines due to falling memory chip prices.
Slowing economies especially in the United States where most Korean chips are consumed have dulled sales, while companies' oversupply of semiconductors added downward pressure to their prices.
Samsung is expected to post 1.7 trillion won in operating profit in the fourth quarter, down 18 percent from a year earlier. Its sales are expected to rise 9 percent to 17 trillion won. Hynix will likely see its operating profit sink 92 percent to 77.7 billion won due to falls in memory prices.
The steel industry also failed to impress the market as it faces growing competition from China. POSCO, Korea's leading steel manufacturer, is projected to post 1.1 trillion won in operating profit, a meager 4 percent growth from a year ago. Sales are expected to edge up 1 percent to 5.5 trillion won.
Among automakers, Hyundai Motor is expected to see its operating profit rise 50 percent from a year earlier to 461 billion won, and sales increase 7.1 percent to 8.1 trillion won.
Some 29 companies are expected to swing to profits from losses in the fourth quarter. LG.Philips LCD is projected to post 801 billion won in operating profit, reversing losses of a year earlier and marking a 13 percent gain from the previous quarter. Its net profit is expected to hit 649 billion won, up 24 percent from the third quarter.
LG Electronics' operating profit is projected to grow by as much as 504 percent to 139 billion won.