Hyundai Motor Q1 hit by slower sales

SEOUL, May 2 (Reuters) Hyundai Motor Co. , South Korea's top auto maker, on Wednesday reported a fourth straight fall in quarterly operating profit, as a labour dispute, higher raw material costs and a firmer won took their toll on sales.

First-quarter net profit also fell 10.2 percent, although Hyundai narrowed its derivatives losses and paid less corporate tax than a year earlier.

Hyundai, the world's No.6 automaker with affiliate Kia Motors Corp. , should show earnings improvement this year as domestic sales, which carry more margin, are expected to rise slightly, along with sales of higher-end models such as the Grandeur.

The maker of the Sonata sedan is likely to report a 15.5 percent rise in 2007 net profit to 1.76 trillion won, according to 22 brokers polled by Reuters Estimates.

Hyundai said it earned 291.4 billion won ($313.1 million) in January-March operating profit, versus 335.3 billion won a year ago, and above 281 billion won forecast by 8 analysts in a Reuters poll.

Fourth-quarter 2006 profit was 306.7 billion won.

The won's value against the dollar on average rose 4.1 percent in January-March from last year and dipped 0.1 percent from the fourth quarter, according to South Korea's central bank.

First-quarter net profit fell 10.2 percent to 307.4 billion won from a revised 342.4 billion won a year ago, below a revised 513.5 billion won profit posted in the previous quarter.

Hyundai booked a 22 billion won loss from derivatives for the quarter, much less than a 135 billion won loss for the year-ago period.

Hyundai had sales of 6.86 trillion won a year earlier and 7.58 trillion won in the last quarter of 2006.

Hyundai sold a revised 611,734 vehicles in the first quarter, down 1.5 percent from a year ago amid a labour dispute over bonus payments in January. The maker of the Santa Fe sports utility vehicle said a January production stoppage by unionised workers cost it 18,513 units, or 266.8 billion won, in lost output.

Shares in Hyundai stood 3.71 percent higher at 61,500 won by 0518 GMT, changing little after the results while the broader market <.ks11> was up 0.53 percent.

Hyundai, valued at more than $14 billion, fell 1.9 percent in January-March, while the benchmark KOSPI index rose 1.3 percent.

The stock trades at 8.6 times forecast earnings, against Japanese rivals Toyota Motor Corp.'s 14.6 times and Honda Motor Co.

Ltd.'s 12.1 times, according to Reuters data.

Last week, Honda forecast a near-3 percent dip in current year profit, and Japan's third-ranked carmaker Nissan Motor Co. said its annual net profit would rise just 4 percent.

($1=930.5 Won) REUTERS SR BD1225