Korean Inc. sees better-than-expected Q2 results led by chip, auto giants

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South Korean companies have fared better in the second quarter thanks to stronger-than-expected results by those in the mainstay chip and automobile industries.

According to financial data tracker FnGuide Inc. on Monday, the combined operating profit of Kospi- and Kosdaq-listed companies with earnings forecasts that have announced second-quarter results as of Friday reached 25.83 trillion won ($19.75 billion).

The figure is down 48 percent from 49.7 trillion won in the same period last year but it is in line with brokerage projections.

Securities firms expect the operating profit of listed companies, which began to decline in the second half of last year, to hit its lowest peak in the second quarter this year before rebounding in the second half.

Brokerages estimated the combined second-quarter operating profit of the listed companies at 25.7 trillion won, which is 0.6 percent lower than the actual results.

Chip and auto stocks performed relatively well.

Market bellwether Samsung Electronics posted an operating profit of 668.5 billion won in the April-June period, which is only one-seventeenth of 11.1 trillion won in the same period last year.

The amount, however, is still more than double that of the brokerages’ estimate at 281.8 billion won.

SK hynix Inc. reported an operating loss of 2.88 trillion won for the second quarter, similar to the estimated loss of 2.89 trillion won.

Hyundai Motor Co. and Kia Corp. also beat the consensus by 1.8 percent and 13.8 percent, respectively.

There were many companies, in the meantime, that announced earnings shocks.

GS Engineering & Construction Co., which came under fire for the collapse of a parking lot at the Geomdan apartment complex in Incheon, posted an operating loss of 413.9 billion won due to rebuilding costs, far exceeding the forecast of 81.8 billion won.

Brokerages also estimated SK innovation Co. to post an operating profit of 136.2 billion won but the company incurred 106.8 billion won in losses due to a decline in oil prices.

S-Oil Corp. posted an operating profit of 36.4 billion won, far below the estimate of 189.4 billion won.

On the secondary Kosdaq market, brokerages forecast L&F Corp. to raise 64.7 billion won in operating profit but the actual amount reached 3 billion won.

More than 70 percent of the listed companies by market cap have announced their second-quarter results. Companies awaiting are SK telecom Co., HYBE Corp., and NCSoft Corp.

Analysts expect second-half results to rebound. They project Kospi-listed companies to report a combined 35.6 trillion won in operating profit in the third quarter and 37.6 trillion won in the fourth quarter.

“While the earnings surprise momentum in raw materials and material related sectors weakens, the information technology and healthcare sectors are improving,” said Choi Jae-won, an analyst at Kiwoom Securities Co. “In the IT sector, investors’ attention is focused on when the earnings will turn around in the second half.”