Profit Pessimism
The estimate of the combined Q2 operating profits of the 183 KOSPI and KOSDAQ-listed companies each covered by at least three securities firms until July 7 decreased by 539.1 billion won (US$474.5 million) from a month ago to 32.0947 trillion won (US$28.2514 billion). During the same period, the sales and net profit estimates declined by 7.7826 trillion won (US$6.8527 billion) and 1.6055 trillion won (US$1.4135 billion) as well, respectively. The quarterly operating profit estimates dropped or remained still for 123 out of the 183 companies. Samsung Electronics’ operating profits for the second quarter of this year are estimated at less than 7 trillion won, which is far below market expectations.
The estimate of the total quarterly operating profits of the 10 major electrical and electronics companies, including Samsung Electronics and LG Electronics, declined by 6.44 percent month-on-month to 9.6379 trillion won (US$). LG Electronics’ earnings estimate fell 22 percent from a month ago and 41.23 percent from a year earlier to reach 356.2 billion won (US$313.5 million). An increase in marketing expenses, the less-than-expected performance of its new smartphones, and the keen competition in the market are regarded as the main culprits.
Despite the current recovery of the semiconductor industry, the figure decreased by 2.92 percent month-on-month to 1.4655 trillion won (US$1.2906 billion) for SK Hynix. “The DRAM price is on the decline, along with that of NAND flash memory, to affect the earnings of SK Hynix,” Eugene Investment & Securities explained.
Hyundai Motor Company, Kia Motors, and Hyundai Mobis are predicted to have recorded 3.2817 trillion won (US$2.8887 billion) in combined operating profits in the second quarter. The estimated figure is 8.9 percent less than a year ago and 4.57 percent less than that of the previous month. Specifically, Hyundai Motor Company’s earnings are forecast to have declined by 13.1 percent year-on-year to 1.8444 trillion won (US$1.6242 billion), and the estimate for Hyundai Mobis decreased by 3.49 percent in one month to 756 billion won (US$666 million).