Samsung Electronics has announced a stellar first quarter, with net profit reaching ₩47.1 trillion, beating estimates. The company's mobile chip operating profit, a key metric, hit ₩57.23 trillion, marking a colossal 700% increase in profit for the March quarter alone. Sales also surpassed expectations, further solidifying a record performance for Samsung, especially in its memory division, which contributed significantly more than in previous quarters. Another figure cited for operating profit was ₩57 trillion, and chip operating profit was also reported at ₩53.7 trillion, with some reports indicating an overall operating profit of ₩89.4 trillion for the second quarter, equating to approximately $58 billion.
Despite Samsung's strong results, including a 19-fold surge in quarterly profits and beating consensus estimates of $55 billion for the second quarter, the market reaction was mixed, with Samsung's stock falling almost 5% after the results were released. This suggests a "buy the rumor, sell the news" scenario played out, even amid bonus payouts. The operating margin for the second quarter was reported at 52%.
In related news, the Federal Reserve decided to hold interest rates steady, despite a divided committee. This decision came after what Goldman Sachs described as the most uncertain policy meeting in nearly 30 years. Three out of the twelve voting committee members dissented, advocating for a hike. Fed Chair Kevin Warsh acknowledged the discussions as a "good family fight," hinting at potential future hikes, though rate futures only indicated a 55% chance of a September hike, down from 75% immediately post-decision. Long bond prices plunged after Warsh's press conference, raising questions about faith in the Fed's commitment to a 2% target.
Other notable market movements include SK Hynix also gaining ground, similar to Samsung. The broader economic context is marked by deepening division amid uncertainty around the Iran War, as well as renewed US-Iran strikes, which are being weighed by traders. Investors are also closely watching the implications of the Fed's stance for future policy, with some speculating that more than three officials might vote to hike in September.
