Investor's Business Daily is the only outlet (so far) to headline revenue vs expectations.
On South Korea's market the stock traded down 9.61%, with the KOSPI down 5.98%.
From IBD, July 28:
South Korean memory-chip maker SK Hynix (SKHY) late Tuesday missed sales estimates for the second quarter. But its net profit was greater than its revenue in the period due to investment gains. SKHY stock advanced after the report.
The company said its Q2 revenue rose 257% year over year to 79.3 trillion won ($54.4 billion). However, analysts polled by FactSet had expected second-quarter revenue of 84 trillion won ($57.6 billion).
SK Hynix said its operating profit surged 557% to 60.5 trillion won ($41.6 billion). Meanwhile, its net profit rocketed 1,242% to 93.9 trillion won ($64.5 billion), fueled by gains related to investment assets, which it didn't specify. Last month, SK Hynix completed the sale of its stake in Japanese Nand flash memory maker Kioxia.
The company did not provide per-share earnings in its news release.
The quarterly report was the company's first since its U.S. trading debut on July 10. The IPO was priced at $149 per American depositary receipt. Every 10 ADRs traded on the Nasdaq represents one common share of SK Hynix stock listed in South Korea. The company's ADR climbed as high as 194.80 on July 14 before retreating. On Tuesday, it fell 9% to close at 130.17 during a broad semiconductor stock sell-off....
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This raises the question of demand destruction if the ever-increasing price of memory is not enough to fuel the top-line hopes and dreams of analysts and investors despite (or because of) the astounding profitability of the chips.
Agence France-Presse caught some of this interplay in their reporting.
From AFP via France24, July 29:
SK hynix posts 1,200% net profit boost on AI chip boom
Seoul (AFP) – South Korea's SK hynix said Wednesday second-quarter net profit soared a whopping 1,242 percent year-on-year, driven by the artificial intelligence industry's explosive demand for its advanced memory chips.
SK hynix is a specialist supplier of high-bandwidth memory chips to US industry behemoth Nvidia, and a pillar of South Korea's tech-led economy.
The global race to build data centres hosting AI infrastructure has seen a meteoric rise in the firm's fortunes, despite concern the sector may be overvalued in a market bubble.
Wednesday's earnings figures, including quarterly net profit of 94 trillion won ($64 billion), were described in a statement by the Icheon-headquartered firm as "an all-time high quarterly performance".
"We are aware of concerns that AI infrastructure investment might be slowing down," marketing chief of the AI microchip division Park Joon-deok said on a call with investors and reporters.
He cited jitters over firms exploring data centre rental -- rather than construction -- and the emergence of new high-efficiency AI requiring a lower memory taskload.
"We view these developments not as a scaling back of AI investment, but rather as a process of maximising the utilisation of the massive AI infrastructure built to date and accelerating its monetisation," he said....
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Here's CNBC with the overview of the report, July 28/29:
SK Hynix shares tank as exponential earnings growth fails to satisfy AI-charged expectations
- SK Hynix hits another record milestone on AI demand.
- Second-quarter profit and revenue both missed estimates.
- Revenue more than tripled from a year earlier.
SK Hynix shares nosedived on Wednesday as exponential second-quarter earnings and revenue growth still failed to satisfy analysts’ supercharged expectations for an artificial-intelligence darling.
Here are SK Hynix’s second-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate:
- Revenue: 79.32 trillion won ($54.55 billion) vs. 84 trillion won expected
- Operating profit: 60.54 trillion won vs. 64 trillion won expected
After falling as much as 15% earlier in the session, the stock trimmed its losses to close 9.6% lower on Wednesday.
Revenue jumped 257% year on year in the quarter ended June from a year earlier, while operating profit soared nearly 557% year on year, the company’s release showed.
Compared with the previous quarter, revenue increased 51% while operating profit gained 61%.
The company said it saw sustained demand growth from expanding AI infrastructure investments, while high-performance products for AI servers led price increases that set a fresh record....
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