Hyundai Motor net profit surges to record

SEOUL (Reuters) - Hyundai Motor Co (005380.KS), South Korea's top automaker, on Thursday reported a better than expected record quarterly profit, though it said a rising won could hurt profits in the fourth quarter.

Hyundai, the world's No.4 car maker along with its affiliate Kia motors Corp (000270.KS) based on first half sales, is expected to keep outpacing its rivals with a growing reputation for low-cost and high-quality vehicles and new models such as the revamped Sonata, analysts said.

The third quarter rise was fueled by higher sales on government incentives and a lack of strike activity.

Still, its outlook is growing gloomier with a rising won and as governments around the world phase out measures to boost car demand, analysts added.

"Third-quarter earnings came very strong and the fourth quarter could be also excellent, thanks to the new model launch, but momentum is likely to slow next year. It will be difficult to beat this year," said Choi Jong-hyeok, fund manager at Midas Asset Management.

The maker of the Elantra compact car is expected to post an almost 40 percent jump in net profit to 2.02 trillion won ($1.72 billion) for the whole of 2009, while its Japanese rivals including Toyota Motor Corp (7203.T) are expected to see profits drop or post massive losses, according to Thomson Reuters I/B/E/S polls.

Hyundai posted a net profit of 979.1 billion won in the third quarter ended on September 30, beating a 616.3 billion won forecast by 11 analysts in a Reuters poll.

That compared with a 264.8 billion won net profit a year earlier and a 811.9 billion won profit in the second quarter of this year.

It reported a 586.8 billion won operating profit in the July-September period, also beating a forecast for a 561.2 billion won profit.

That also compared with a 104.5 billion won profit a year ago and a 657.3 billion profit in the April-June quarter.

After the earnings, shares in Hyundai were down 0.48 percent to 103,000 won as of 0522 GMT, compared with a 1.4 percent fall in the wider market .KS11.

Third quarter sales rose 33.8 percent to 8.10 trillion won from a year ago.

Hyundai said the strengthening won, higher oil prices and interest rates could hurt profitability in the final quarter of the year.

Unionized workers at Hyundai have yet to launch any strikes this year, after staging 12 partial strikes in the third quarter of last year during wage negotiations that cost 44,645 vehicles, or 690.5 billion won in lost output, according to company data.

The results came as the won gained 8.1 percent against the dollar during the quarter ended September 30 in addition to an 8.6 percent jump in the previous quarter.

Hyundai's shares jumped 50 percent in the third quarter, far outperforming a 14.5 percent gain in the country's main KOSPI Index .KS11, but both have lost ground since amid concerns over the impact of a stronger won.

($1=1176.4 Won)

(Reporting by Cheon Jong-woo and Jonathan Thatcher; Editing by Jonathan Hopfner)