Samsung Electronics reported preliminary second-quarter results that exceeded market expectations, yet its shares fell more than 5% in early trading, dropping below 300,000 won. The decline is attributed to profit-taking following a recent surge in stock prices, shifting market focus to the future semiconductor industry outlook and sustainability of profit momentum.
As of 9:29 a.m. on July 7, Samsung's stock was trading at 299,500 won, down 18,500 won (5.82%) from the previous trading day.
On this day, Samsung announced that its consolidated revenue for the second quarter reached 171 trillion won, with an operating profit of 89.4 trillion won. Compared to the previous quarter, revenue increased by 27.74%, and operating profit rose by 56.21%. Year-over-year, revenue surged by 129.31%, and operating profit skyrocketed by 1,810.26%.
For the first half of the year, Samsung reported cumulative revenue of 304.87 trillion won and operating profit of 146.63 trillion won, marking increases of 98.34% and 1,190.76%, respectively, compared to the same period last year.
Despite these record results, the stock's weakness is seen as a result of the recent sharp rise in share prices, which had already priced in much of the earnings expectations, along with profit-taking triggered by the earnings announcement.
Market analysts believe that the direction of the stock price will be determined more by future semiconductor industry trends and potential upward revisions of profit estimates than by the current results.
Han Ji-young, an analyst at Kiwoom Securities, stated, "The key factor will be changes in annual profit estimates for 2026 centered around semiconductors after today. Currently, the consensus for operating profit estimates for Samsung and SK Hynix has only increased by 6-7% since June." He noted that this is limited compared to the 73% and 48% upward adjustments seen during the first quarter earnings season for Samsung and SK Hynix, respectively. He added that upcoming events, such as SK Hynix's American Depositary Receipt (ADR) event scheduled for this week, could influence the recovery momentum of the KOSPI index centered on semiconductors.
There are also forecasts for continued improvement in performance. Son In-jun, an analyst at Eugene Investment & Securities, remarked, "The memory business is driving overall performance due to competition among clients for inventory and increased pricing power. The shipment of High Bandwidth Memory 4 (HBM4) and the expansion of long-term supply contracts (LTA) are expected to positively impact performance." He anticipates that the average selling prices (ASP) of DRAM and NAND flash will continue to rise in the third quarter, leaving room for further upward revisions of performance estimates, and added that the recent stock price adjustment is merely a temporary correction within a bullish market.
* This article has been translated by AI.
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