Tuesday's preliminary earnings disclosure put Samsung's second-quarter operating profit at 89.4 trillion won ($58.4 billion), roughly nineteen times what the company earned in the same three months of last year — yet shares in Seoul gave up as much as 10% during the session before settling 6.9% lower at the close.
For the third quarter running, Samsung set a new high-water mark for operating profit. At 171 trillion won, second-quarter revenue came in at more than twice the 74.6 trillion won the company posted a year prior. Wall Street had penciled in operating profit of around 87.3 trillion won, a bar the company cleared, Reuters reported.
A near-150% run-up in Samsung shares over the course of the year meant that by the time Tuesday's figures landed, a blockbuster quarter had already been baked into the price, analysts said, leaving the beat with little power to push the stock higher.
"Samsung's strong earnings were widely expected and had largely been priced in after its shares rallied ahead of the results," Albert Yong, a managing partner at Petra Capital Management, said. "Investors remain concerned about the sustainability of the AI boom and the risk of slower AI infrastructure spending by major U.S. technology firms."
A Morgan Stanley $MS note published the day before the earnings release warned that the recent pullback in chipmaker shares was not yet over, pointing to expectations that large cloud operators would soon impose tighter controls on capital spending, according to Reuters.
Bonus provisions weighed on the headline number: a wage agreement reached earlier this year ties 10.5% of the semiconductor division's annual operating profit to employee bonuses, and analysts said that stripping out those charges would have pushed the quarterly figure above 100 trillion won.
Additional pressure came from Samsung's recently announced plan to spend roughly 400 trillion won building a new semiconductor manufacturing hub in southwestern South Korea. According to Counterpoint Technology Market Research director Tom Kang, speaking to CNBC, the chosen site sits well outside South Korea's established chipmaking corridor, meaning utilities, facilities and supporting infrastructure would all need to be created from the ground up in a region investors do not typically associate with advanced semiconductor production.
Rival SK Hynix stock closed down 6% on Tuesday. The company kicked off a U.S. share offering worth 43 trillion won on Monday, according to Reuters, with the stock due to begin changing hands on Friday. eToro market analyst Zavier Wong told CNBC that the timing of the SK Hynix listing drew capital that might otherwise have flowed toward Samsung.
A full earnings report covering each business division is scheduled for July 30.
