Samsung Electronics’ stock price has been struggling to reach the 80,000-won (US$60.61) mark. On Jan. 9, the company concluded the market at 74,700 won, recording a decrease of 1,800 won, or 2.35%, compared to the previous day. Although Samsung Electronics briefly rose to 77,000 won in the early market hours, it experienced a downturn around 11 a.m. and failed to recover. The market capitalization decreased by approximately 10.51 trillion won compared to the previous day.
Before the opening, Samsung Electronics revealed its preliminary operating profit for the fourth quarter of last year, based on consolidated figures, which amounted to 2.8 trillion won. This indicates a substantial decrease of 35.0% compared to the corresponding period in the preceding year. During the same period, the sales revenue was recorded at 67 trillion won, showing a 4.91% decrease.
These financial results fall below the consensus estimates of brokerage firms. Financial information provider FnGuide initially estimated Samsung Electronics’ fourth-quarter revenue and operating profit to be 70.36 trillion won and 3.74 trillion won, respectively. However, the preliminary figures announced on the day for the fourth quarter are lower than the consensus estimates by 3.36 trillion won and 944.1 billion won, respectively.
Last year’s consolidated operating profit stood at 6.54 trillion won, marking a significant decrease of 84.92% compared to the previous year. The sales also decreased by 14.58% to 258.16 trillion won. Samsung Electronics’ annual operating profit falling below 10 trillion won is the first time since 2008 when it was 6.03 trillion won. The annual operating profit is also approximately 13% lower than the securities industry consensus of 7.49 trillion won, recording the lowest operating profit in 15 years.
On the other hand, SK hynix, considered one of the representative semiconductor-related stocks along with Samsung Electronics, saw a 1.03% increase, showing a contrasting performance. Currently, both companies are fiercely competing in the memory semiconductor market, including High Bandwidth Memory (HBM) used in artificial intelligence (AI) applications.
The rise in SK hynix’s stock price can be attributed to the influence of Nvidia, which set a new record high on the New York Stock Exchange. Nvidia, which unveiled household AI chips at CES 2024, surged by 6.4%, leading to concurrent strength in other AI-related stocks like AMD with an increase of 5.4% and Micron with 1.8%. Currently, both SK hynix and Samsung Electronics supply HBM to Nvidia.