Shares of Samsung Electronics Co. rose the most in more than two months on Thursday despite weaker preliminary second-quarter earnings.
Shares of the South Korean tech giant soared a whopping 3.7% to 58,500 won ($44.82) in early afternoon trading and are on course to post their steepest daily percentage gain since April 28, when they rose 4 % gained.
The rally in the blue-chip stock, which accounts for 19% of Kospi’s total market value, helped the benchmark index surge 1.8%.
The earnings guidance Samsung gave early Thursday was somewhat bearish, as the company said its recent string of record quarterly results likely ended in April-June as the global tech boom slowed.
Revenue and operating profit for the second quarter are expected to be KRW 77 trillion and KRW 14 trillion, respectively – slightly weaker than the results of KRW 77.78 trillion and KRW 14.12 trillion recorded in the first quarter.
Hyundai Motor Securities analyst Greg Roh attributed Thursday’s rally to a correction of recent sharp losses.
“The market has already priced in Samsung’s weaker second-quarter results. Some investors think the recent sell-off was overdone,” Mr. Roh told Dow Jones Newswires. “Today’s rally also reflects investor confidence in Samsung’s resilience despite market concerns.”
Samsung, the world’s leading manufacturer of memory chips and smartphones, has a diverse product range and is both a device manufacturer and a parts supplier.
So far this year, shares of the tech industry leader are down about 25%.
The global technology sector is facing headwinds from rising inflation, which is weighing on consumer spending, and also from a slowdown in pandemic-related demand.
Write to Kwanwoo Jun at email@example.com
https://www.marketwatch.com/story/samsung-shares-rise-despite-softer-earnings-expectations-271657173195?rss=1&siteid=rss Samsung shares rise despite weaker earnings expectations