South Korean steelmaker POSCO <005490.KS>, backed by billionaire investor Warren Buffett, posted a 54 percent drop in first-quarter profit because of slack demand, lower product prices and higher raw-material costs.
Earnings are set to improve from the second quarter as prices of key steel-making ingredients including iron ore and coking coal decline, while China's slowing economy may curb profit growth, analysts say.
POSCO, which gets 70 percent of its revenue from domestic sales, said on Friday operating profit fell to 422 billion won ($370.8 million) on a parent basis in January to March from 921 billion won a year earlier, missing a consensus forecast of 439 billion won from Thomson Reuters I/B/E/S.
First-quarter sales rose to 9.46 trillion won from 9.11 trillion won a year earlier, said POSCO, the world's No.3 steelmaker after ArcelorMittal
Shares in POSCO, in which Buffett's Berkshire Hathaway
Asian steelmakers are facing weaker demand from China, the world's biggest consumer of the alloy used in ships, cars and construction, after the country's economy grew at its weakest pace in nearly three years in the first quarter.
(Reporting by Hyunjoo Jin; Editing by Ryan Woo)