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Brokerages cut Q1 profit outlook for listed firms

All News 09:37 January 28, 2016

SEOUL, Jan. 28 (Yonhap) -- Brokerage houses have cut their first-quarter prospects for South Korean listed firms, disappointed by a slew of worse-than-expected quarterly reports released amid the ongoing earnings season, data showed Thursday.

The combined operating profits for 186 listed companies is estimated at 30.5 trillion won (US$25.2 billion) for the January-March period, down 3.1 percent from a month ago, according to the data compiled by market researcher FnGuide.

Their guidance for sales and net profit decreased 1.5 percent and 3.8 percent, respectively, compared with a month earlier.

Electronics parts and engineering industries faced the deepest cut of 36 percent as major tech companies posted sluggish earnings in the last three months of 2015.

On Thursday, Samsung Electronics Co., the world's largest handset maker, reported a sharp drop in fourth-quarter profits as its smartphone business stuttered on weak demand amid falling chip prices.

Samsung SDI Co., a battery-making unit of the Samsung Group that shocked the market with massive deficits in the previous quarter, was expected to book 35.8 billion won of operating losses in the first quarter.

Analysts also projected a grim outlook for the display, shipbuilding and logistics industries due to the economic slowdown in China and slumping oil prices that could affect overseas projects in the Middle East.

The guidance for the auto sector also retreated 7.4 percent due to a lack of growth momentum in the coming months.

Hyundai Motor Co.'s fourth-quarter net profits fell 7.7 percent from a year earlier as the won's ascent against other currencies eroded its global competitiveness.

In contrast, securities companies sharply upgraded their prospects for pharmaceutical companies, and projected a better prospect for electricity and beverages companies.

"Additional earnings guidance downgrades are expected considering uncertainties in the macroeconomic environment," Han Yo-seop, a researcher at Daewoo Securities, said.

ejkim@yna.co.kr
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