The operating profits of 141 listed firms is expected to fall by an aggregate 17 percent in the first quarter of 2020, after the COVID-19 pandemic crushed hopes that corporate performances would recover from the drawn-out U.S.-China feud, data showed Sunday.
Seventy-two of the firms have a poorer-than-expected corporate outlook, outnumbering the remainder that viewed otherwise.
Firms set to report an operating profit increase in the January to March period include Samsung Electronics (0.08 percent), Hyundai Motor (4.14 percent) and Samsung C&T (67.99 percent), alongside Korea Electric Power Corp. (KEPCO) which is expected to report a snap out of net losses.
Those set to report operating profit drops are SK hynix (66.7 percent), LG Electronics (5.35 percent), POSCO (43.77 percent), Hyundai Mobis (2.29 percent) and Kia Motor (30.78 percent), while SK Innovation is also expected to go into the red.
According to FN Guide, a financial data service provider, the consolidated operating profit of the 141 firms was estimated at 16.7 trillion won ($9.4 billion) as of April 3, down 16.92 percent from last year.
The forecast is fanning concerns that some major firms are set to record a double-digit year-on-year decrease in operating profit for the second consecutive year.
In 2019, 573 listed firms reported a 36.88 percent year-on-year drop in the first quarter, due to the U.S.-China feud and subsequent deterioration of global economic and financial conditions.
According to separate data from the Korea Exchange (KRX) and Korean Listed Companies Association, 583 firms saw an aggregate 102.2 trillion won operating profit in 2019, down 6.2 trillion won, or 37 percent, from the year before.
Their net profit more than halved to 52.4 trillion won, down 58.7 trillion won, or 52 percent.
With no breakthrough in sight in the feud between the world's two largest economies, the COVID-19 pandemic is all but certain to lead to sharper-than-feared drops in corporate earnings in the months to come.
On Jan. 20, the data provider initially forecast that the 141 firms would report 22.8 trillion won in operating profits in the first three months of 2020, up 9 percent from first quarter last year.
But the rosy forecast rapidly evaporated, dropping 24 percent as of April 3. Jan. 20 was the day Korea reported its first confirmed case of the new coronavirus.
According to market analysts, investor sentiment could largely hinge on whether the top listed firm, Samsung Electronics, will manage to report 6 trillion won in operating profit for the first quarter. The firm will announce earnings estimates, Tuesday.
The analysts say the company's quarterly earnings report is of much significance, given the fear that the economic fallout triggered by COVID-19 will be clearly illustrated in the figures.
"The psychologically significant 6 trillion won could be the baseline for many market watchers to determine how fast corporate performance may deteriorate and how delayed any expected recovery in the industry would be," NH Securities analyst Kim Byung-yeon said.
Many brokerages have revised down their forecast for Samsung's share price to 60,000 from 70,000 won, saying a dent in demand for home appliances and smartphones will take more than a quarter to recover.