Hyundai Posts 28% Rise in Profit, Misses Forecasts
Hyundai Motor on Thursday posted a 28 percent rise in quarterly net profit but the result missed forecasts by a wide margin as rising raw material prices offset higher sales fueled by a weaker won.
South Korea's top automaker, which with affiliate Kia Motors is the world's No.6 auto maker by sales volume, posted a first quarter net profit of 392.7 billion won (US$395.8 million), widely missing a 559.2 billion won forecast by 10 analysts in a Reuters poll.
That compares with a 307.4 billion won net profit a year ago and a 338 billion won net profit in the fourth quarter of 2007.
A softer won and new factories in China and India are expected to lift Hyundai's earnings this year, although higher oil and raw materials prices may hurt, analysts said.
Demand for more upmarket models such as the new Genesis sedan is also likely to bolster overall sales, especially in the higher-margin domestic market, of which Hyundai controls half.
Reflecting the optimism, shares in Hyundai, valued at around $18.4 billion, rose some 10 percent during the January-March period, easily outperforming a 10 percent fall in the broader market.