Samsung SDS Reports Decline in Operating Margin for Q3

Samsung SDS shares fell in late trading, reflecting market concerns over a decline in operating margin reported in its third-quarter earnings.

As of 2:22 PM on October 29, Samsung SDS was trading at 210,000 won, down 12,500 won (5.39%) from the previous trading day, according to the Korea Exchange.

The drop in Samsung SDS's stock price appears to be linked to worries stemming from its third-quarter results. The company reported a more than 11% increase in revenue year-on-year, driven by expansion in its cloud and logistics businesses. However, intense competition for contracts led to a decrease in operating margin.

Specifically, Samsung SDS recorded consolidated revenue of 3.7725 trillion won and operating profit of 241 billion won for the third quarter. This represents an 11.2% increase in revenue and a 3.7% increase in operating profit compared to the same period last year.

However, the operating margin fell to 6.4%, down 0.4 percentage points from 6.8% in the third quarter of last year. Samsung SDS explained that the increase in non-Samsung clients has intensified competition for contracts.

Notably, the logistics segment saw a significant decline in profitability. Revenue from the logistics division reached 2.0915 trillion won, a 16% increase year-on-year. However, operating profit was only 39.6 billion won, resulting in an operating margin of 1.9%.