According to financial data provider FnGuide, operating profit forecasts for the April-June quarter were revised lower for 94 of 233 listed companies covered by at least three brokerages over the past three months.
Steelmakers, utilities, retailers, travel operators and entertainment companies recorded the steepest downward revisions as soaring oil and energy prices drove up raw material and transportation costs, while sluggish domestic demand continued to squeeze margins.
Among major companies, Hyundai Steel suffered the largest downgrade, with its second-quarter operating profit forecast slashed 48.1 percent over the past three months.
Higher iron ore prices, rising freight costs and a prolonged slump in the domestic construction sector eroded profitability, while lower steel prices supplied to automakers added further pressure.
Korea Electric Power Corp. followed with a 30.7 percent reduction in its earnings forecast as higher crude oil, liquefied natural gas and coal prices sharply increased fuel costs. Other companies facing sizeable earnings downgrades included CJ ENM and E-Mart.
Hyundai Motor's second-quarter operating profit estimate was lowered 12.1 percent as weaker vehicle sales in China and the Middle East, together with production disruptions caused by factory fires, weighed on earnings.
Consumer-serving businesses saw substantial downward revisions on inflation and higher interest rates.
Hana Tour posted the steepest cut in the sector, with its operating profit forecast reduced 52.0 percent as weak currency and high oil prices dampened overseas travel demand.
CJ Freshway's earnings estimate fell 17.4 percent after the food distributor stepped up investment in its online business amid a prolonged downturn in the restaurant industry.
E-Mart's operating profit outlook was lowered 25.8 percent as its Starbucks Korea unit, SCK Company, is expected to swing to an operating loss following weaker sales tied to its controversial Tank Day promotion.
Entertainment companies also came under pressure as rising production costs met softer consumer demand.
YG Entertainment's operating profit estimate dropped 36.1 percent after the agency increased spending ahead of comeback promotions for BABYMONSTER and TREASURE.
Game and media companies including Netmarble, Neowiz, SOOP and CJ ENM also saw earnings forecasts trimmed as weaker household spending weighed on game sales and television advertising.
CJ ENM is expected to narrow losses on the back of strong original content on TVING and the popularity of Korea Baseball Organization broadcasts. However, sluggish television advertising and fewer productions at its U.S. subsidiary Fifth Season are expected to limit the recovery.
Banks benefited from wider lending margins, lifting second-quarter operating profit forecasts for KB Financial Group, Shinhan Financial Group and Hana Financial Group by between 100 billion won and 300 billion won compared with estimates three months ago.
Brokerages also emerged as major beneficiaries of the stock market rally. Mirae Asset Securities' second-quarter operating profit estimate more than doubled to about 1.9 trillion won from roughly 800 billion won three months earlier as trading volumes surged.
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