Top Firms Set to Report Disappointing Results
By Kim Yoo-chul
Staff Reporter
Top firms are reporting disappointing results. POSCO Thursday reported a net profit of 721 billion won ($521 million) in the October-December period, up 1.1 percent from 713 billion won a year earlier but down 41 percent from the previous quarter. A median market estimate was one trillion won.
Sales went up 53 percent to 8.31 trillion won with operating income jumping 60 percent to 1.39 trillion won, according to the company.
Shares of POSCO closed at 359,000 won in trading, a drop of 5.28 percent. The fourth-quarter earnings were released after the market closed.
The results came amid concerns that the global steel industry is facing a sharp drop in demand as automakers, electronics companies and shipbuilders are faced with financial difficulties resulting from the worldwide crisis.
POSCO said earlier this week that it may have to extend its first-ever output cut through the current quarter due to reduced demand from automakers and shipbuilders. Analysts say the bleak forecast of the fourth-quarter earnings by big companies is acting as a double whammy coming together with the global slump.
"Worse-than-expected fourth-quarter earnings on top of the bad economy is dragging down the KOSPI. KOSPI will experience more correction till the second half of this year,'' Park Seok-hyun, an analyst at Eugene Investment, said.
"I forecast the KOSPI may fall below 1,100 as negative outlook from corporate earnings and economic data emerge," So Jang-ho, an analyst at Samsung Securities said. "Little as there is a chance of panic selling last October," So said.
LG Display, another blue-chip in flat-screen segment, is likely to post its worst-ever quarterly net loss in the fourth quarter after being hit with a $400 million fine over price-fixing charges in the United States. "We posted quarterly losses," said a high-ranking industry source. LG will release the fourth-quarter earnings, Friday.
Rising inventories, weak demand and price decline in flat-screen panels are also burdening Samsung Electronics.
Samsung, the world's biggest LCD panel producer, is also forecast to report its biggest drop in its flat-panel business. Samsung, which has been widening its "adjustment" in panel productions, is also set to slash this year's LCD investment to a maximum of 2.5 trillion won.