(Bloomberg) — STX Offshore & Shipbuilding Co., a South Korean yard that is undergoing debt rescheduling, led a decline among shipyards and engine makers in Seoul trading on concerns that first-quarter earnings may be worse than expected.
STX Offshore, the world’s fourth-largest shipyard, fell 13 percent to close at 3,230 won, the lowest price since it started trading in October 2003. STX Engine Co., the world’s third- biggest marine engine maker, fell 15 percent to 4,125 won.
Concerns that earnings at South Korean companies may fall below projections were spread after GS Engineering & Construction Corp. reported an unexpected loss from rising costs, according to E*Trade Securities Korea. Shipyards posted losses or profit declines in the fourth quarter on lower ship prices and a drop in orders for new vessels.
“GS Engineering’s loss has spooked investors,” said Park Moo Hyun, an analyst at E*Trade. “Investors are becoming more doubtful about earnings prospects not just for shipyards. STX Group shares were the worst hit because small investors are dumping the shares.”
GS Engineering posted an operating loss of 535.4 billion won ($474 million) for the first quarter as costs at overseas projects jumped. Analysts expected a profit of 69 billion won, according to data compiled by Bloomberg.
The Seoul-based company expects a loss for this year and profit in the first half of 2014, according to a regulatory filing April 10. Its stock fell by the daily 15 percent limit for a second day to 35,700 won.
Daewoo Shipbuilding & Marine Engineering Co., the world’s second-biggest yard, fell 7.7 percent to 24,500 won. Hyundai Heavy Industries Co., the world’s biggest, declined 6 percent to 188,000 won.
Copyright 2013 Bloomberg.