Tuesday, August 20, 2019
Samsung Group’s Q2 Earnings Found below Expectations
Performances of Top 5 Conglomerates
Samsung Group’s Q2 Earnings Found below Expectations
  • By Michael Herh
  • August 4, 2016, 01:00
Share articles

Among the surveyed 35 affiliate companies of the top 5 conglomerates, 22 companies performed better than the market expected.
Among the surveyed 35 affiliate companies of the top 5 conglomerates, 22 companies performed better than the market expected.

 

With major listed companies’ second quarter earnings announcements nearly finished, the five biggest business groups are now showing the bright and dark sides of their business performances in the second quarter. In the case of the Samsung Group, although it is happy with the strong business performance of Samsung Electronics, about 60% of its listed subsidiaries did not satisfy the market’s expectations. 

According to FN Guide on August 3, a financial information company, among the five largest business group’s listed companies of which three or more securities firms had less-than-three-month earnings estimates of, 35 companies announced their earnings by August 2. Among the 35 firms, 22 performed better than the market expected.

Among the 22 firms, seven came up with earnings surprises which mean that their operating income was 10% more than the market expected. By contrast, 13 companies underperformed compared to the market’s expectations. Among them, four companies recorded earnings shocks, exhibiting 10% or more differences. By business groups, only four companies -- Samsung C&T (88.66%), Samsung Electronics (7.77%), Samsung SDS (3.54%), Cheil Communications (0.53%) – performed beyond expectations in terms of operating income among 11 of the Samsung Group’s 15 listed companies. The 11 firms released their earnings.

Among the four, only Samsung C&T inked an earnings surprise that performed over 10% better than the market expected although Samsung Electronics posted 8-plus trillion won in operating income. Three companies -- Samsung Engineering (-91.68%), Samsung Electronics (-44.26%) and Shilla Hotel (-37.94%) –- brought earnings shocks to the market and Samsung SDI and Samsung Heavy Industries chalked up bigger losses. Even though a slump in exports lowered the market’s expectations, it can be said that Hyundai Motor put up a good fight.

With nine of 11 affiliates of the automotive group having announced their earnings, eight including Hyundai Motor (4.68%) performed beyond expectations. While Hyundai Rotem (125.13%) recorded an earnings surprise, Innocean (9.25%), Hyundai Steel (6.32%), Kia Motors (5.50%), Hyundai Glovis (4.41%), Hyundai Engineering & Construction (2.67%) and Hyundai Mobis (1.32 percent) posted operating income which satisfied the market’s expectations. Among affiliates of the Hyundai Automotive Group, only Hyundai Wia (-13.47%) performed below expectations.

Only five of 15 affiliates of the SK Group disclosed their performances as of the writing of this article. It is said that the SK Group has achieved a half success. SK Innovation (20.62%) turned out an earnings surprise while three affiliates including SK Hynix (0.53%), SK Materials (0.27%) performed beyond expectations. But SK Telecom (-4.48%), SK Networks (-1.96%) underperformed. 

LG and Lotte showed relatively good performances. Eight of the LG Group’s 12 listed affiliates released their second quarter business scorecards and five -- LG Life Sciences (58.06%), LG Display (32.14%), LG Chemical (7.22%), LG boss (6.15%), LG U + (2.12%) –- announced their strong performances. However, LG Innotek recorded bigger loss while LG Electronics (-2.20%) and LG Hausys (-7.05%) failed to satisfy market expectations.

The Lotte Group has a total of nine affiliates listed on the stock market. Up to the present, Lotte Fine Chemicals (36.16%) and Lotte Chemical Company (22.57%) have been the only two Lotte affiliates that announced their second quarter earnings. Both recorded earnings surprises.