S. Korean companies likely to post sluggish Q2 earnings: experts

South Korea's key industries of electronics, oil refining and petrochemical and cars are likely to post sluggish second-quarter earnings reports, industry experts warned Sunday ahead of the April-June earnings season slated for July 10 through mid August.

The experts attributed the weak results to high oil prices, the won's gain against the U.S. dollar and a slump in domestic demand.

A plunge in retail prices is also expected to have contributed to the poor performance by the electronics industry. Samsung Electronics Co., the world's largest computer memory chipmaker, is expected to report 1.6 trillion won in net profit and 1.4 trillion won in operating profit in the April-June period, both down about 15 percent from the previous quarter, according to online financial information provider Fn Guide.

LG Philips LCD Co. is expected to have incurred more than 100 billion won in operating loss in the quarter, the experts said.

Sales by POSCO, world's fifth-largest steelmaker, likely reached 4.86 trillion won in the second quarter, up 4.18 percent from three months earliar. The estimated figure, however, is 9.65 percent lower compared to quarterly sales a year earlier, they said.

To improve earnings, the company plans to lift prices of hot-rolled coil by 40,000 won per ton and cold-rolled coil by 20,000 won per ton next month, they said.

The petrochemical industry is forecast to see reduced earnings for the second quarter due to a drop in sales margin, reduced domestic demand on high prices and a surge in the cost of raw materials such as naphtha. SK Corp., the nation's largest oil refiner, will likely post a 4 percent drop in operating profit, they said.

Car manufacturers are not likely to achieve their projected earnings as a result of the worse-then-expected economic environment. South Korea's largest carmaker Hyundai Motor Co. sold 1.1 million units between January and May, up 11.6 percent from a year earlier, but short of its sales target of 2.69 million units.

Kia Motors Corp., an affiliate of Hyundai Motor, was 20 percent short of its domestic sales target for the period, they said.

Meanwhile, the shipbuilding, airline and retail industries are believed to have remained bullish between April and June thanks to a recovery in demand.

Seoul, July 2 (Yonhap News)