Hyundai Motor projected a progressive earnings recovery after publishing a smaller-than-expected 21 percent drop in quarterly profit as sales of higher-margin vehicles cushioned the impact of a U.S. recall and earnings decrease in China.
The forecast-beating incomes helped Hyundai shares increase 4.5 percent. The South Korean automaker’s shares have actually been under pressure just recently due to issues about prolonged weakness in China, its greatest market, as South Korea continues with its strategy to deploy a U.S. anti-missile defense system in spite of China’s opposition.
The automaker together with affiliate Kia Motors reported on Wednesday a first-quarter net profit of $1.18 billion (1.33 trillion won), its 13th straight year-on-year quarterly fall. Experts polled by Thomson Reuters I/B/E/ S had on average anticipated a 1.25 trillion won net earnings.
Hyundai noted an operating profit of 1.25 trillion won and sales of 23.37 trillion in the January to March quarter.
Its retail sales dropped 14 percent in the first quarter in China, a market where it has been having a hard time these days.
“China sales falls in March are not the result of internal aspects, however the outcome of growing anti-Korean sentiment since late February, and some rivals making the most of anti-Korean sentiment in marketing,” stated Zayong Koo, Hyundai vice president, on a teleconference.
With a heavy dependence on sedans and a poor brand image in China, Hyundai has struggled to rival local Chinese brands that are armed with affordable SUVs. Hyundai greatly cut production at China factories in March to decrease stocks, sources previously informed Reuters.
