This file photo shows the buildings of South Korea’s major companies in Seoul. (Yonhap)
SEOUL, Oct. 20 (Korea Bizwire) — South Korean brokerage houses have sharply lowered their third-quarter earnings outlook for major listed firms amid rising inflation and other negatives, a market tracker said Wednesday.
The combined net profit forecast for 168 major listed firms came to 29.7 trillion won (US$25.2 billion) for the July-September period as of Tuesday, up 4.3 percent from a year earlier, according to financial information provider FnGuide.
Yet, it represents a 34 percent plunge from their estimate of 44.9 trillion won made a month earlier.
The businesses cover those for which three or more local securities companies have put forward their forecasts for third-quarter net income.
Their operating income projection has also been revised down. The companies are predicted to post a combined operating profit of 58.75 trillion won for the three-month period, up 50.1 percent from a year earlier.
It is also down 0.1 percent from their outlook of 58.83 trillion won presented a month earlier.
But their sales forecast has been revised up 0.1 percent to 508.2 trillion won from 507.6 trillion won over the cited period.
Brokerages’ downgrades come amid concerns that growing inflation will likely result in rising costs for local companies, which will in turn weigh on their performances.
Top-cap Samsung Electronics Co. and other major companies have reported mixed preliminary results for the last quarter.
In its earnings guidance, the South Korean tech giant estimated its operating profit at 15.8 trillion won for the quarter. It was the company’s second-largest quarterly figure but down slightly from a market consensus.
Last week, LG Electronics Inc. estimated its third-quarter operating profit to drop nearly by half from a year earlier largely due to a recall provision cost.
Leading steelmaker POSCO, however, estimated its third-quarter operating profit at 3.11 trillion won for the third quarter, up a whopping 364.2 percent from a year earlier.
Brokerage houses have predicted turnarounds for Hyundai Motor, SK Innovation, S-Oil, Hotel Shilla, Korean Air Lines and Hanmi Pharmaceutical, which all posted operating losses in the third quarter of 2020.
However, they have downgraded operating income estimates for Hyundai Motor, SK Innovation and Hotel Shilla from a month earlier.
(Yonhap)
