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Hyundai, Kia Decline After Earnings Miss Analysts’ Estimates: Seoul Mover

January 26, 2012
2 min to read


Hyundai Motor Co. and its smaller affiliate Kia Motors Corp. fell in Seoul trading after South Korea’s two biggest automakers reported fourth-quarter profits that missed analysts’ estimates.


Hyundai fell for a second day, slipping as much as 3.7 percent to 220,500 won at 10:44 a.m. on the Korea Exchange, while Kia dropped as much as 2.9 percent. Seoul-based Hyundai, maker of the Elantra sedan, yesterday reported net income that was about 10 percent below the average analyst estimate compiled by Bloomberg, while Optima-maker Kia today delivered profit that was 27 percent lower than the average estimate.

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The share declines signal investors are betting that Hyundai and Kia, the two best performers on the Bloomberg World Auto Manufacturers Index in 2011, will fail to replicate their success this year as Toyota Motor Corp. and Honda Motor Co. recover from natural disasters in Japan and Thailand. This week, Honda President forecast Takanobu Ito forecast earnings will climb to the highest in at least five years and Toyota raised its sales forecast.


“There’s an underlying concern that Hyundai and Kia may not perform as well as they did last year,” said Lee Jin Woo, a fund manager at Seoul-based KTB Asset Management Co., which manages the equivalent of $3.6 billion in assets, including Hyundai and Kia shares. “This uncertainty will continue throughout the year, and each misstep will trigger the concern.”


Hyundai’s full-year net income rose 35 percent to 8.1 trillion won ($7.2 billion), more than the combined estimated earnings at Toyota and Nissan Motor Co. Still, the quarterly results missed estimates because of unexpected bonus payments at financial affiliate Hyundai Capital, Gregory Kim, an analyst at Mirae Asset Securities Co. in Seoul, said yesterday.


Kia, the maker of the Optima sedan and Rio compact, today delivered fourth-quarter net income, operating profit and revenue that missed average analyst estimates compiled by Bloomberg.


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