CORRECTED (OFFICIAL)-POSCO Q4 profit misses forecast on weak China demand, lower prices
(POSCO corrects year-ago comparable profit in 2nd paragraph. Also corrects percentage change in 1st paragraph)
SEOUL Jan 29 (Reuters) - POSCO, the world's No.5 steelmaker by output, reported a 51 percent fall in quarterly operating profit, missing a consensus forecast, as tepid demand and falling prices offset lower raw material costs helped by a firmer local currency.
The South Korean company on Tuesday said its October-December operating profit was 379 billion won ($346.7 million) on a parent basis that does not reflect earnings of affiliates, below an average forecast of 490 billion won in a Reuters' poll of 25 analysts. This compared with an operating profit of 771 billion won a year earlier.
Fourth-quarter sales fell 20 percent to 8.07 trillion won, compared with a consensus forecast of 8.35 trillion won.
Steelmakers are struggling with a combination of a chronic oversupply and a tepid demand recovery in China, the world's top consumer of the alloy used in the construction, shipbuilding, automobile and home appliance sectors.
China's economy grew at its slowest pace in 13 years in 2012 and the recovery should be only modest this year due to the European debt crisis and a slow U.S. recovery.
The South Korean won appreciated nearly 8 percent versus the dollar last year, helping reduce import costs of steelmaking ingredients iron ore and coking coal.
Prior to the earnings announcement, shares in POSCO, backed by billionaire investor Warren Buffett, ended down 0.1 percent in a wider market that rose 0.8 percent.
Shares in POSCO, which trails ArcelorMittal and China's Baosteel in steel production, have been rebounding since late November on hopes China's economy will rebound.
($1 = 1093.2500 Korean won)
(Reporting by Hyunjoo Jin)
- Israel pummels Gaza; Kerry steps up diplomatic push |
- Ukraine war crimes trials a step closer after Red Cross assessment
- With sales sputtering, Apple's iPad looks to IBM alliance
- Five held in China food scandal probe, including head of Shanghai Husi Food
- South Korea ferry fugitive hid in cabin wall, suitcases of cash at hand