Samsung Electronics announced its second-quarter results for the year, falling short of market expectations, causing its stock price to decline in early trading on the 4th. However, by revealing plans for a large-scale share buyback, it is limiting the loss.
Samsung Electronics' shares were traded at 61,500 won at 9:12 a.m. on the 8th in the KOSPI market. The stock price dropped by 0.32% (200 won) compared to the previous day. The stock initially surged to 62,400 won before retreating to 61,000 won, and then rebounding slightly.
Samsung Electronics reported that it recorded consolidated sales of 74 trillion won and an operating profit of 4.6 trillion won for the second quarter, based on preliminary data. Both sales and operating profit are 2% and 26% lower than market expectations, respectively.
This is interpreted as a result of modest performance in the high-bandwidth memory (HBM) business, which is a crucial component of artificial intelligence (AI), and an increase in the deficit of the System LSI and foundry divisions. These two divisions experienced operating losses exceeding 2 trillion won in the first quarter as well.
However, the news of the share buyback is helping to defend against a sharp drop in stock prices. Samsung Electronics plans to buy back 3.51 trillion won worth of common shares and 400 billion won worth of preferred shares (Samsung Electronics preferred) from September 9 to October 8. Of this, 1.1 trillion won will be used for employee compensation, and the remaining 2.8 trillion won will be burned after the repurchase.