Samsung Electronics nears 100 trillion won in quarterly operating profit, but shares stall for third straight trading day

[Financial News] Expectations for Samsung Electronics’ earnings rose as it was forecast to post quarterly operating profit of more than 100 trillion won for the first time ever, but its shares weakened ahead of the earnings announcement.
On the 7th, Samsung Electronics closed at 268,500 won, down 3,500 won (1.29%) from the previous trading day. Shares rose as much as 2.57% intraday to 279,500 won, but pared their gains in the afternoon and eventually turned lower. The gap between the high and the closing price reached 3.9 percentage points.
Although the share price did not fall sharply, the day’s trading showed that investors were not driven solely by optimism ahead of the earnings announcement. Trading volume also rose by about 19% to 22,698,955 shares, from 19,063,419 the previous day.
With trading volume rising sharply as the share price searched for direction in a flat range, profit-taking and additional buying appear to have been evenly matched ahead of the earnings announcement. Samsung Electronics’ third-quarter results are expected to be record-breaking. According to financial information provider FnGuide, the consensus forecast for third-quarter operating profit is 106.6401 trillion won. If the forecast proves accurate, Samsung Electronics will be the first domestically listed company to post quarterly operating profit of more than 100 trillion won. The revenue forecast also stands at 200.6417 trillion won.
But these figures are already old news in the market, and securities firms believe that much of the prospect of Samsung Electronics exceeding 100 trillion won in third-quarter operating profit has already been priced into its shares.
Indeed, forecasts from securities firms range from the low 100-trillion-won range to around 110 trillion won. The market’s benchmark has therefore shifted from whether the company reaches 100 trillion won to how far it beats consensus.
Third-quarter results have effectively become a known quantity, and the key factors determining the next direction of Samsung Electronics’ share price are how quickly HBM4 sales grow from the fourth quarter and whether the rise in memory prices continues into next year.
A stronger won is also a headwind for earnings. For Samsung Electronics, which has a high export share, a decline in the won-dollar exchange rate reduces reported earnings when profits earned in dollars are converted into won.
Supply-and-demand factors are also a concern. Goldman Sachs cited foreign investors’ net selling of Samsung Electronics shares for five consecutive trading days and the overlap of the earnings announcement, ETF rebalancing, options expiration and the end of share buybacks as factors that could heighten short-term volatility.
This does not mean Samsung Electronics’ fundamentals are weakening. Conditions in the memory market, the main driver of the improvement in third-quarter results, remain robust. Rising DRAM and NAND prices have lifted earnings, while results from U.S. memory makers have also provided positive signs for future memory demand.
Kim Sun-woo, an analyst at Meritz Securities, said, “Mobile memory prices for major customers are expected to rise by at least 50% starting in the first quarter, underpinned by memory makers’ continued production transitions,” and forecast, “Alongside upward revisions to next year’s earnings estimates, the appeal of growth, undervaluation and shareholder returns will all come together.”

[email protected] Kang Jung-mo Reporter