Stronger won fuels fears of earnings misses among Korean exporters
Korea’s leading exporters face a growing risk of missing third-quarter earnings expectations as a sharp appreciation of the won erodes the local-currency value of sales generated in dollars, market analysts said Friday. The currency shift has prompted brokerages to lower their profit estimates for major exporters. A weaker won benefited exporters in the second quarter, when the won-dollar…
Korean exporters are increasingly concerned about the potential for missing third-quarter earnings projections due to the won's sharp appreciation, which has diminished the local currency value of their dollar sales, according to market analysts. This currency shift has led brokerages to revise downward their profit estimates for top exporters.
The favorable won-to-dollar exchange rate in the second quarter has since disappeared, as the exchange rate has dropped 12.7 percent from 1,549.4 won at the end of June to 1,352.9 won at the end of September, compressing profitability. A stronger won means that dollar-denominated revenue and profits are less valuable in won terms, potentially making Korean products less competitive in global markets on price.
Exporters, especially automakers, are worried that their results may fall short of even the revised consensus estimates, with some fearing significant earnings shortfalls.
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- Stronger won fuels fears of earnings misses among Korean exporters koreatimes.co.kr
