Most corporations that have released results so far in this year's first-quarter earnings season, which began with Samsung Electronics' "earnings surprise," posted solid results, securities analysts said on the 22nd. For SK hynix, which is set to release preliminary results on the 23rd, an analysis noted, "When first-quarter operating profit beat expectations, the stock tended to maintain an upward trend through the year, and when it missed, the downward trend was pronounced."
Earlier, Samsung Electronics preliminarily reported first-quarter operating profit of 57 trillion won, about 30% above prior market expectations.
According to IBK Securities, following Samsung Electronics, 22 corporations had preliminary results released through the 20th. The combined year-over-year operating profit growth rate of the 22 corporations that released results surged 631%.
Byun Jun-ho, an analyst at IBK Securities, said, "Most of this is attributable to the Samsung Electronics effect," but added, "Even excluding Samsung Electronics, the growth rate of the 21 corporations is 30%, which is solid."
Among the 22 corporations, only five recorded an operating loss year over year or saw losses expand, while 17 either swung to profit or posted growth rates all above 30%.
Among the nine corporations for which a market consensus (average forecast) exists, six posted first-quarter operating profit above expectations, a 67% beat rate.
Byun said, "Because the first quarter generally tends to beat the market's expectations, it is ambiguous to say the 67% figure is very good, but given that the sample size is still small, the trend appears steady and solid."
The combined operating profit beat ratio for the nine corporations reaches 30%, but excluding Samsung Electronics it was calculated at 8%. IBK Securities said the situation is still somewhat solid even without Samsung Electronics.
Byun said, "Given that results already released by corporations, centered on Samsung Electronics, are solid, confidence in a first-quarter and even full-year earnings surge is expected to be maintained or strengthened."
In particular, according to Quantwise's consensus estimates, first-quarter operating profit this year is around 140% of last year's level, and full-year operating profit is approaching a 190% year-over-year increase. The likelihood of an unprecedented earnings surge materializing this year is rising.
Attention now turns to SK hynix's preliminary first-quarter results, which are scheduled to be released on the 23rd.
Byun said, "As the corporation that best represents Korea's semiconductor cycle, alongside Samsung Electronics' results it is the most important variable for market outlook."
He added that SK hynix's first-quarter operating profit is expected to surpass the market's forecast level of 38 trillion won with strong results.
IBK Securities' analysis shows that over the past 10 years, SK hynix's first-quarter operating profit exceeded market expectations seven times.
Byun said, "The reason SK hynix's first-quarter results matter is that subsequent share-price reactions differed greatly depending on beats or misses," adding, "When first-quarter operating profit beat expectations, an upward trend tended to persist through the year, while misses showed a clear downward trend."