POSCO Q4 results below estimates, profit up 33%

Seoul: POSCO, the world’s No.3 steelmaker, reported a smaller-than-expected 33 percent gain in quarterly operating profit, as it was unable to fully pass on soaring raw material costs to customers due to a weak global economy and demand.

The South Korean company on Friday said its October-December operating profit was 692 billion won on a parent basis, below a consensus forecast of 839.3 billion won from Thomson Reuters. That was up from 519 billion won a year earlier and down from 1.09 trillion won the previous quarter. Fourth-quarter sales rose to 10 trillion won from 9.2 trillion won a year earlier.

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POSCO, backed by billionaire investor Warren Buffett, last month estimated a 4.2 trillion won operating profit in 2011, down 12 percent from a year ago. Sales rose 20 percent to 39.17 trillion won last year, it said.

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Prior to the earnings announcement, shares in POSCO, which trails ArcelorMittal and China’s Baosteel in steel production, ended down 0.36 percent in a wider market that fell 0.6 percent.

Reuters