The earnings outlook for South Korea’s listed firms remains cloudy for the fourth quarter as Samsung Electronics Co., the country’s top market cap, and other market heavyweights are unlikely to break out of their business slump on the weaker Japanese yen and a global slowdown, the latest data showed Friday.
The combined operating profit estimate for 168 listed companies was reduced by 1.4 percent for the October-December period to 27.68 trillion won ($25.24 billion) as of Thursday from an estimate of 28.1 trillion won a month ago, according to the data compiled by financial information provider FnGuide.
From three months earlier, their combined operating income was also cut by a whopping 11.2 percent, the data showed.
Analysts said the gloomy fourth-quarter estimates came as Samsung Electronics and other major firms are coming under added pressure for a downgrade on slowdowns in the eurozone and the Chinese economy and the weaker Japanese yen.
Samsung, which accounts for a third of combined operating income made by all listed firms, is expected to report 4.8 trillion won in operating income for the fourth quarter, compared with an estimate of 7.5 trillion won made three months earlier, according to the data.
The world’s largest manufacturer of smartphones reported that its third-quarter net profit reached 4.22 trillion won, the lowest in three years on waning sales of flagship smartphones, as it faces challenges ahead in competing with smaller Chinese startups and long-time rival Apple Inc.
Its operating profit also plunged 60 percent on-year to 4.1 trillion won in the third quarter, from a record high of 10.1 trillion won in the same quarter of 2013.
Hyundai Motor Co., South Korea’s largest automaker, also suffered a downgrade in its fourth-quarter earnings outlook as the weaker yen is likely to undercut its price competitiveness in overseas markets.
From three months earlier, its operating income estimate for the fourth quarter was cut by 5 percent to 2 trillion won.
The automaker reported an 18-percent drop in its third-quarter operating income at 1.6 trillion won.
“Major firms’ third-quarter performance was too bad, and their poorer than expected results are weighing their fourth quarter earnings outlook,” said Kim Kwang-hyun, an analyst at Yuanta Securities.
According to the brokerage house, 110 listed firms that have released their third-quarter earnings suffered a 22 percent drop in their operating income from a year earlier. (Yonhap)
