Kia Income Rises 8% As Sales Grow in China

Kia Motor Corp. boosted net earnings to 1.2 trillion won ($1 billion) in the April-June period this year from 1.1 trillion won ($972 million) a year earlier.

Revenue increased 5% to 13.1 trillion won ($11.6 billion).

But quarterly operating profit dropped 9% to 1.1 trillion won ($998 million). As a result, operating return on sales shrank to 8.6% from 9.8% in the same period of 2012. Analysts attribute the decline to higher incentives and a stronger won.

Vehicle sales rose 2% to 731,000 units in the latest quarter, thanks largely to a 22% jump in demand in China. Volume grew nearly 2% in Europe and was flat in the U.S. Sales fell 4% in both Korea and Latin America.

Kia warns that results in the second half could be dampened by slower global car sales growth, China's cooling economy and the possibility that the Federal Reserve will let U.S. interest rates rise. The company says it will raise vehicle prices to preserve profitability.