SEOUL, South Korea (AP) -- Hyundai Motor Co., South Korea's largest auto maker, said Monday its net profit tumbled 37 percent in the second quarter from a year ago as the strong South Korean won eroded the company's export revenue.þþHyundai Motor earned 387.29 billion won ($402 million) in the three months that ended June 30, compared with 613.20 billion won a year before, the company said in a statement, well below analysts' forecast.þþSales edged up 0.8 percent to 7 trillion won ($7.2 billion) as domestic sales slipped 1.8 percent while exports shed 8.7 percent.þþThe earnings announcement came as the chairman of Hyundai Motor Co., Chung Mong-koo, who is accused of embezzling company money to create a slush fund for bribing political lobbyists, appeared in a court Monday afternoon.þþThe results were worse than expected. According to a recent poll of 11 analysts surveyed by Dow Jones Newswires, Hyundai Motor was expected to post a net profit of 479.1 billion won ($498 million).þþ''Although the earnings weren't that good, the results were already priced in and some investors now think the worst is over,'' said Choi Dai-Shik, an analyst at CJ Investment & Securities.þþA stronger local currency reduces the value of overseas earnings when converted back to won, and also hurts demand for Hyundai vehicles abroad where they become more expensive. Exports account for about 60 percent of Hyundai Motor's revenues.þþLooking ahead, analysts are expressing some concern about the second half.þþHyundai Motor's labor union staged a monthlong strike from June 28 through to the end of July, resulting in production losses of 93,882 vehicles worth 1.3 trillion won ($1.3 billion). The union ended the strike after getting a 5.1 percent rise in basic pay.þþThe production losses from the strike will inevitably hurt Hyundai's earnings in the second half, analysts said.þþHyundai and its affiliate Kia Motors Co. are aggressively expanding overseas production to meet the goal of becoming the world's six-largest carmaker by 2010. þþ
Source: NY Times
