Major Firms Forecast to Suffer Poor Q1 Results

Major South Korean companies are likely to see their first-quarter earnings worsen sharply, buffeted by a tumble in global trade and stubbornly weak domestic demand, Yonhap News Agency reported Sunday, quoting market watchers.

In the wake of the global financial crisis, the world economy is expected to shrink this year for the first time since World War II. The South Korean economy is also forecast to post negative growth.

According to analysts, Samsung Electronics will likely to post an operating loss of up to one trillion won ($710 million) for the January-March period due to sluggish global demand and weak prices of chips and liquid crystal displays.

For the fourth quarter of last year, the electronics giant recorded an operating loss of 740 billion won.

A market consensus of Samsung's first-quarter sales amounts to 16.9 trillion won, compared with 17.1 trillion won for the same period a year earlier.

Smaller rival LG Electronics is also projected to see its first-quarter performance slacken.

LG Electronics is predicted to post 6.6 trillion won in sales, slightly down from 6.9 trillion won a year earlier, but its operating profit will likely tumble to 83.4 billion won from 564.2 billion won.

Hyundai Motor and other carmakers are feared to post far worse results for the current quarter.

In the first two months of this year, the automakers sold 435,919 units, down 30.9 percent from the 631,000 vehicles sold a year earlier.

Steel makers are no exception. Top steel maker POSCO's sales are expected to rise 16.9 percent to 7.9 trillion won for the first quarter, but its net profit is likely to plunge 54.1 percent to 472.8 billion won.

Market watchers said other major companies in oil-refining, retail and other key industrial sectors will inevitably see their first-quarter performances deteriorate drastically, hit by the global economic slowdown.