SEOUL (Reuters) – Hyundai Motor (005380.KS) posted a 68 percent plunge in quarterly net profit, missing an analyst consensus by a large margin as U.S. recall costs weighed.
FILE PHOTO: A worker fixes the Hyundai logo on a vehicle at a plant of Hyundai Motor in Asan, south of Seoul, February 9, 2012. REUTERS/Lee Jae-Won/File Photo
Shares in the automaker tumbled as much as 10 percent.
The South Korean automaker has had to grapple with costs stemming from airbag and engine-related recalls in the United States. A U.S. safety group this month called for an expansion of the engine recall, citing a surge in fire complaints.
Third-quarter net profit came in at 269 billion won ($236 million), compared with 852 billion won booked in the same period a year earlier.
That missed a SmartEstimate of 831 billion won, according to Refinitiv data.
Operating profit slumped 76 percent to 289 billion won in the quarter while sales rose 1 percent to 24.43 trillion won.
Hyundai had been counting on its new Santa Fe SUV to turn around its flagging fortunes in the United States where it had missed out on a SUV boom due to its heavy reliance on sedans.
But its U.S. retail sales rose only 1 percent in the third quarter from a year earlier. And in China, Hyundai saw sales declines despite an agreement between Seoul and Beijing to normalize ties, putting a diplomatic row that had hit sales of South Korean goods behind them.
Hyundai is also bracing for a decision from the United States as to whether it will slap tariffs on imports of vehicles and vehicle parts.
South Korea has argued it should get tariff exemptions, saying it has already made concessions in the auto sector after a bilateral deal was revised last month.
Reporting by Hyunjoo Jin; Editing by Edwina Gibbs