Hyundai Motor on Thursday disclosed a sharper-than-anticipated decline in fourth-quarter earnings, attributing much of the deterioration to heightened import duties in its largest market, the United States. The South Korean automaker recorded an operating profit of 1.7 trillion won for the three months to December 31.
The reported operating profit was well below Bloomberg's projection of 2.7 trillion won and represented a 40% drop from the 2.8 trillion won logged in the same quarter a year earlier. Hyundai also fell short of revenue expectations, posting 46.8 trillion won for the quarter versus estimates of 48.1 trillion won.
Company commentary attributed the weaker-than-expected performance chiefly to U.S. trade tariffs. Hyundai remains subject to a 15% blanket duty established under a November trade agreement between Seoul and Washington, and it said those duties had a negative effect of 1.5 trillion won on operating profit in the fourth quarter.
Hyundai and its affiliate Kia Corp together rank as the world's third-largest automaker by sales. The two companies sold a combined 7.27 million vehicles in 2025 and continued to see robust demand in North America despite the elevated U.S. tariffs.
Even as North American demand held up, the company highlighted the apparent squeeze on margins from the additional duties. In response, Hyundai set targets for the coming year: an operating margin goal of 6.3% to 7.3% for 2026, and projected revenue growth of between 1% and 2% compared with last year.
For investors and market participants focused on unit economics and margin structure, the results underscore how trade measures can offset currency and volume advantages. Hyundai's Q4 figures show that sustained demand does not necessarily insulate profitability from policy-driven cost increases, and the company will be monitoring whether its margin guidance for 2026 is achievable given the stated tariff impact.
Summary of results
- Operating profit: 1.7 trillion won for Q4 (three months to December 31).
- Bloomberg estimate for operating profit: 2.7 trillion won.
- Q4 operating profit a 40% decline from 2.8 trillion won a year earlier.
- Q4 revenue: 46.8 trillion won; estimate: 48.1 trillion won.
- Estimated negative impact from U.S. tariffs on Q4 operating profit: 1.5 trillion won.
- Vehicle sales for Hyundai and Kia combined in 2025: 7.27 million units.
- 2026 targets: operating margin 6.3% to 7.3%, revenue growth 1% to 2% year-over-year.