Micron falls as Samsung’s record profit misses forecasts

Micron Technology ↘ 5.30% shares fell about 2.6% in U.S. premarket trading on Thursday, October 29. Samsung Electronics had reported record third-quarter results that still came in below some analyst forecasts, and the reaction spread to other memory chipmakers. Barron's said Samsung's report showed that memory-chip companies "can be the victim of high expectations" News Corp ↘ 1.37%.finance.yahoo.com+1

The selloff hit several memory names. SanDisk ↘ 13.47% fell 2.6% and SK Hynix ↘ 7.95% dropped 1.9% in premarket trading.finance.yahoo.com

Record profit, missed estimates

For the quarter ended September 30, Samsung reported revenue of 195.3 trillion won and operating profit of 107.4 trillion won. The company said it was the first tech company in the world to top 100 trillion won in quarterly operating profit. Net profit rose 514.6% from a year earlier to 75.13 trillion won, short of the 87.01 trillion won average analyst estimate compiled by Yonhap Infomax. Revenue and operating profit were slightly below LSEG SmartEstimates of 195.79 trillion won and 107.66 trillion won Comcast Corporation ↗ 4.27%.news.samsung.com+2

Samsung's chip division earned 106.5 trillion won in operating profit, about 99% of the company's total. Revenue from its HBM4 high-bandwidth memory more than tripled from the previous quarter. Samsung shares closed 4.13% lower in Seoul. Investors had expected a shareholder-return announcement, and its delay to next year also weighed on the stock. Samsung declared 30 trillion won in third-quarter dividends. It plans to return another 55 trillion to 75 trillion won through dividends and buybacks, with final details due at a board meeting in late January 2027.cnbc.com+2

Supply outlook stays tight

Samsung said it expects memory supply to stay tight for the next few years, keeping chip prices high. It also said multiyear supply contracts could cover 60% to 70% of its planned production capacity by 2030. The company expects AI infrastructure spending to speed up in 2027, which would squeeze memory supply further.cnbc.com+1

That outlook did little to lift the mood. "Investors have been so spoilt by the AI trade that a record result is now treated as the bare minimum rather than a reason to celebrate," said Josh Gilbert, eToro's lead analyst for Asia-Pacific. He added that "anyone holding the stock today is really holding a memory maker with a phone business attached".cnbc.com