Hyundai Motor Co <005380.KS> reported a 47 percent rise in quarterly profit on Thursday and said earnings would continue to grow thanks to strong global demand for new models and as Japanese rivals struggle with the aftermath of the March 11 earthquake and tsunami.
The South Korean firm is less reliant on Japanese parts than other global car makers such as General Motors and is widely seen among the biggest beneficiaries of a prolonged slump in Japanese output this year following the quake.
Hyundai, the world's fifth-biggest carmaker along with affiliate Kia Motors <000270.KS>, is expected to see earnings grow further in the second quarter on the back of higher market share and reduced incentives.
Hyundai has been emerging as an alternative to Japanese cars, shaking off its image as a maker of cheap cars, said Lee Dong-jin, a fund manager at KTB Asset Management. It's now seeing some benefits from increasing production at overseas plants while the world took a hit from the financial crisis.
After the results were announced, Hyundai shares rose more than 5 percent. The stock has risen 35 percent so far this year, hitting a succession of record highs and comfortably beating a 8 percent rise in KOSPI <.KS11>.
Hyundai shares have overshot in recent days but I think the upward trend will continue, Lee said.
Honda Motor Co <7267.T>, Japan's No.3 automaker and fourth-biggest in the U.S. market, said on Monday it would take until the end of the year before production returned to normal, echoing recent comments from Toyota <7203.T>.
Hyundai reported a 1.88 trillion Korean won ($1.7 billion)in January-March net profit, compared with 1.28 trillion won a year ago.
Hyundai was reporting earnings on a consolidated basis to reflect earnings of its affiliates including financial operations under new accounting rules, and there were no consensus guidelines for the result.
Hyundai outperformed its global peers in the last quarter thanks to popular models such as the Sonata mid-sized sedan and the Elantra compact in the United States, South Korea and other markets.
The company said sales were especially good in the United States and China last quarter, rising by 28 percent and 30 percent respectively, while its overall global sales rose 10 percent from a year ago.
The first quarter earnings are very good and the outlook is even rosier...(but) one risk factor is exchange rate trends, since export markets account for a large part of Hyundai Motor's earnings, said Kang Sun-sik, chief analyst at Woori Asset Management.
($1 = 1077.550 Korean Won)
(Additional reporting by Jungyoun Park, Ju-min Park and Yerim Kim; Editing by Matt Driskill and Jonathan Hopfner)