Revenue rises, but Hyundai Motor's profit declines

Source: Global Market Report

Impacted by weak global auto sales, Hyundai Motor Company's first-quarter earnings fell short of expectations. Despite a decrease in U.S. tariffs, continued pressure persisted for this South Korean auto giant.

According to a trade agreement between South Korea and the United States, U.S. tariffs on most Korean exports have been lowered to 15% starting this November. As a result, the impact on the automaker's profits from tariffs will ease slightly in the first quarter of 2026, but the effect remains significant.

The company announced on Thursday that net profit for January to March fell 24% year-on-year to 2.585 trillion won, approximately $1.75 billion. The decline was narrower compared to the 52% plunge in the previous quarter. During the earnings call, Hyundai Motor executives stated that tariffs brought about 860 billion won in losses to the company this quarter.

The company's revenue grew 3.4% to 45.939 trillion won; operating profit fell 31% to 2.515 trillion won.

According to data from financial data provider FactSet, analysts previously expected the company’s first-quarter net profit to be 2.480 trillion won and revenue to be 45.866 trillion won.

Global vehicle sales declined by 2.5% during the period, reflecting the challenging market environment caused by slowing global demand and intensified competition. The U.S. and Indian markets bucked the trend, with sales rising by 0.3% and 8.5%, respectively.

Hyundai Motor stated that tensions in the Middle East have led to higher oil prices, driving up demand for hybrid vehicles and sport utility vehicles (SUVs) in the U.S. market.

The company previously warned that the operating environment would face challenges and expects a similar impact on this year's earnings as the approximately 4.1 trillion won loss from U.S. tariffs forecasted for 2025.

Despite the gloomy profit outlook, the automaker's share price has risen about 80% this year. Analysts say the company's layout in the artificial intelligence and robotics sectors has driven the stock higher.