The logo of Samsung Electronics is displayed at its office in southern Seoul's Seocho-dong, July 5. Yonhap
Korean businesses have begun to reveal their earnings guidance for the second quarter, with chipmakers and electronic devices firms heralding encouraging numbers. On the other hand, battery manufacturers are forecasting sluggish performances amid the slowing growth of electric vehicle (EV) sales.
Samsung Electronics last week estimated its operating profit for the second quarter of this year will reach 10.4 trillion won ($7.54 billion), a jump of about 1,452 percent from 670 billion won a year ago. The company also expected sales for the same period to be 74 trillion won, up 23.31 percent year-on-year.
Though the earnings guidance did not break down which sectors contributed to the improvement, analysts assume that its chip businesses achieved an operating profit of at least 6 trillion won, beating market trackers' assumptions that it would be between 4 trillion won and 5 trillion won.
“In terms of semiconductors, memory chips' selling price rose sharply during the period, resulting in overall improvements in the company's second-quarter performances,” said Kim Sun-woo, an analyst at Meritz Securities, assuming that Samsung Electronics' Device Solutions division could have recorded 6.1 trillion won in operating profit.
SK hynix, which is set to announce its earnings guidance soon, is also expecting a sound performance. NH Investment & Securities recently assumed that the company will likely log an operating profit of 5.1 trillion won and 16.1 trillion won in sales for the April-June period.
SK hynix's rosy outlook is attributable to the rise in global demand for high-bandwidth memory (HBM) following the rapid growth of artificial intelligence technologies.
LG Electronics also forecast solid numbers for the second quarter. In its earnings guidance, the company estimated its operating profit would come to 1.2 trillion won, up 61.2 percent from a year earlier. If realized, it will be the first time for LG Electronics to post an operating profit of over 1 trillion won in a second quarter.
The company forecast 21.79 trillion won in sales for the period, up 8.5 percent year-on-year. Analysts attribute the rebound to the growth in home appliances and business-to-business contracts.
Hyundai Motor's Kona Electric / Courtesy of Hyundai Motor
Carmakers are also expected to extend robust sales and operating profits in the second quarter. Market trackers assume that Hyundai Motor Co.'s operating profit will stand at 4.1 trillion won, while that of its co-affiliate Kia will reach 3.59 trillion won.
The estimation came as the carmakers successfully coped with sluggish global EV demand in the second quarter with hybrid vehicles.
The downtrend in EV markets is expected to affect the earnings of battery makers.
In its earnings guidance revealed on Monday, LG Energy Solution said its second-quarter operating profit is anticipated to stand at 195.3 billion won, down 57.6 percent from a year earlier. Given that the operating profit was compensated 447.8 billion won through the U.S. Advanced Manufacturing Production Credit (AMPC), the company virtually recorded a loss for the period.
The outlook is also gloomy for another battery maker, SK On. It is anticipated to extend its losing streak for the 11th quarter straight, with market trackers forecasting an operating loss between 200 billion won and 300 billion won in the second quarter. Samsung SDI is also feared to see a 10.56 percent drop in its operating profit from a year earlier, standing at 402.6 billion won, according to market assumptions. The two companies plan to reveal their earnings guidance on Aug. 1 and July 30, respectively.