South Korea’s second-largest carmaker reported profit missed estimates after a three-week strike at home cut production and a stronger won curbed the company’s competitiveness in the U.S.
Third-quarter net income rose 8.9 % to 903.3 billion won ($850 million) from 829.5 billion won a year earlier, the Seoul-based company said today. A three-week strike at home cost the company an estimated 414 billion won in lost production, while sales in the quarter slumped 4.9 % in the U.S., the carmaker’s biggest market, according to the company.
Kia, together with its biggest shareholder Hyundai Motor Co., is facing increased competition as a weaker yen gives Japanese carmakers an edge in the U.S.
“Strikes at home and falling sales in key overseas markets would have had an adverse impact on Kia’s earnings,” Lee Sang Hyun, an analyst at NH Investment & Securities Co., said before the earnings announcement. “The company is expected to make up for the loss from the strikes in the fourth quarter, and will be able to meet the annual target.”
The company’s sales fell 4.9 % in the U.S. market last quarter, while its deliveries rose 1.5 % in Europe in the July to September quarter.
Sales in China rose 9.8 percent to 131,410 units in the last quarter, trailing behind the market average of 14 percent increase and competition is expected to intensify as the Japanese automakers rebound from declining sales that began last year after a territorial dispute led to violent anti-Japan protests in the world’s biggest auto market.
) - Friday, October 25th, 2013 - filed under Industry
, Sales Reports
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