Hyundai Motor : Third-Quarter Results Hit Hard by Extra Recall Costs -- Earnings Review

By Kwanwoo Jun

Hyundai Motor Co. reported its third-quarter results Monday. Here is what you need to know.

NET LOSS: The South Korean car maker posted a net loss of 188.80 billion won ($167.3 million), compared with a net profit of KRW460.50 billion in the same quarter a year earlier. That was below a FactSet consensus forecast for a net profit of KRW936.36 billion.

REVENUE: Third-quarter revenue rose 2.3% to KRW27.576 trillion, but the company posted an operating loss of KRW313.82 billion compared with an operating profit of KRW378.52 billion a year earlier.

WHAT WE WATCHED:

--BIG DENT: Hyundai Motor swung to net loss as extra recall costs put a big dent in its third-quarter results. It attributed the earnings setback to an additional KRW2.100 trillion provision to cover the expenses for recalls related to engine defects.

--UNEVEN RECOVERY: The company's shipment recovery was uneven. Hyundai Motor's third-quarter global car sales declined 9.6% despite strong domestic demand from new model launches. Vehicles sales jumped 22% in South Korea but decreased 15% in the rest of the world for the quarter.

--UNCERTAIN OUTLOOK: Uncertainties weigh on its business outlook because of a fresh wave of coronavirus cases and the won's strength against the dollar.

Write to Kwanwoo Jun at [e-mail]

(END) Dow Jones Newswires

10-26-20 0307ET