'Record-high operating profit,' but Samsung Electronics plunges by around 6%... Shares retreat despite 'earnings bonanza' [Stock NOW]

[Financial News] Samsung Electronics' stock plunged despite the company reporting third-quarter results at a record level. The shares, which had been rising early in the session, reversed course after the results were released and fell by around 6%.
With the semiconductor business falling short of the market's heightened expectations and additional shareholder-return measures also failing to meet investors' expectations, the 'earnings bonanza' has not translated into a rise in the share price.
According to the Korea Exchange, as of 11:18 a.m. on the 29th, Samsung Electronics was trading at 226,500 won, down 15,500 won (6.40%) from the previous trading day's close.
The stock moved higher early in the session, rising at one point to 249,000 won, but its losses widened after the earnings announcement. At the same time, the KOSPI was also down 2.94%, and Samsung Electronics' share-price volatility increased amid subdued investor sentiment across the market.
Samsung Electronics disclosed that its third-quarter operating profit this year, on a consolidated basis, rose 783.1% year over year to 107.4405 trillion won. Revenue increased 126.9% to 195.2532 trillion won.
The Device Solutions (DS) division, which oversees the semiconductor business, recorded revenue of 147.1 trillion won and operating profit of 106.5 trillion won. In effect, the semiconductor division accounted for most of the company's total operating profit.
However, the market's reaction was not as positive as the earnings figures. Kim Joo-yeon, an analyst at Mirae Asset Securities, noted, "Samsung Electronics opened higher, but volatility is widening as the stock reverses course after it became clear that semiconductor operating profit in the previous quarter had fallen short of heightened expectations."
The gap between expectations and the actual announcement of the shareholder-return policy also came into focus. Samsung Electronics said on a conference call that day that the remaining funds for shareholder returns, excluding amounts already distributed and the cash dividend finalized by the board at its latest meeting, were in the range of 55 trillion to 75 trillion won.
However, specific plans for deploying the funds are to be announced at a board meeting at the end of January next year. There is speculation that disappointed investors may have sold shares because the additional shareholder-return measures expected by the market were not spelled out immediately.
Samsung Electronics will also pursue facility investments totaling 84.4 trillion won to meet growing demand for artificial intelligence (AI) semiconductors.
Future investment results and whether the shareholder-return policy is fleshed out are seen as key factors for the share price. The decline in the stock despite record results shows that investors are assessing future earnings growth and the potential to enhance shareholder value more rigorously than current performance.
[email protected] Kang Jung-mo Reporter