SEOUL, April 21 (AJP) - Hyundai Motor is expected to post a sharp drop in first-quarter earnings, as rising tariff burdens, war-related disruptions and currency-driven costs squeeze margins despite relatively resilient global demand.
According to data compiled by FnGuide, the automaker’s operating profit is forecast at 2.4 trillion to 2.6 trillion won, down 38 to 50 percent from a year earlier. The company is set to report results on Thursday.
The downgrade reflects intensifying cost pressures toward the end of the quarter, including higher tariffs, rising raw material prices and increased warranty provisions, which have become more expensive amid a sharp weakening of the Korean won against the U.S. dollar.
Eugene Investment & Securities is among the more cautious, projecting operating profit at 2.46 trillion won. Revenue, however, is expected to remain broadly stable at around 45 trillion won, slightly up from 44.4 trillion won a year earlier.
The key swing factor lies in the United States, where tariff-related expenses alone are estimated at around 1 trillion won for the quarter, according to DS Investment & Securities.
The anticipated earnings miss appears largely cost-driven rather than demand-led. Global wholesale volumes are projected to have declined by about 3 percent year-on-year, suggesting underlying demand has held up relatively well.
Regional performance has been mixed. U.S. shipments were broadly flat at around 243,000 units, reflecting steady demand, while Europe recorded an 8 percent decline. The Middle East saw a steeper 30 percent drop following the outbreak of war, highlighting the growing impact of geopolitical shocks on volume.
Product mix trends have also diverged. Hybrid vehicle sales rose about 28 percent year-on-year, supporting revenue, while battery electric vehicle volumes fell 7 percent, limiting margin recovery.
Brokerages expect earnings to bottom out in the second quarter before rebounding in the second half, supported by new model launches and a more favorable product mix.
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