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Corporate earnings outlook upgraded on techs, refiners

All Headlines 10:23 April 08, 2016

SEOUL, April 8 (Yonhap) -- South Korea's listed firms are expected to have racked up improved earnings in the first quarter, helped by a good performance from logistics firms, oil refiners and tech firms, including Samsung Electronics Co., data showed Friday.

The combined operating profit estimate for 192 listed companies was raised by 2.26 percent to 30.67 trillion won (US$26.4 billion) for the first quarter as of Wednesday from a month earlier, according to the data by financial information provider FnGuide.

"Some companies are expected to report better-than-estimated results for the first quarter, and market expectations about corporate earnings improvement are running high," said Baek Chan-kyu, an analyst at KB Investment & Securities.

Earlier this week, South Korean tech giant Samsung Electronics reported its first-quarter earnings guidance, which hovered far above the previous forecast, apparently on the back of early sales of its flagship smartphone, the Galaxy S7.

Samsung said it is believed to have posted an operating profit of 6.6 trillion won in the January-March period, up 10.37 percent from the same period last year. From the previous quarter, the first-quarter estimate also marks a 7.49-percent rise.

The estimated earnings hovered far above the market consensus of 5.6 trillion won by 22 South Korean brokerage houses, according to data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency.

The analyst said it is very positive to see continued improvement in the performance of the country's IT firms and refiners, which will boost the overall corporate earnings outlook.

"Energy, petrochemicals firms and steelmakers are entering an upside cycle, which means corporate earnings would not be bad," said Kim Dae-jun, an analyst at Korea Investment & Securities.

The data also showed that their second-quarter operating income estimate was also raised by 1.14 percent to 30.87 trillion won from a month earlier.

sam@yna.co.kr
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