SK Hynix is scheduled to report its third-quarter results after the U.S. market close on Tuesday. Here is what you need to know:
US-listed SK Hynix shares rose 2.1% in premarket trading.
NET PROFIT: The world's second-largest memory-chip maker's net profit likely reached 61.418 trillion won, equivalent to $46.32 billion, for the quarter ended September, according to a FactSet-compiled consensus forecast. That would be a nearly fivefold increase from a year earlier.
REVENUE: Quarterly revenue is expected to have quadrupled to a record 98.202 trillion won, according to FactSet, with operating profit projected to have risen more than sixfold to 76.995 trillion won, also a record.
SK Hynix shares tumbled 33% in the third quarter amid investor skepticism about the sustainability of the artificial-intelligence investment boom and the chip demand it has fueled. Still, the stock has doubled this year.
WHAT TO WATCH:
--EARNINGS: Analysts expect net profit to fall short of the record of nearly 94 trillion won set in the second quarter, when sizable one-off gains from SK Hynix's investment in Japanese chip maker Kioxia boosted earnings. Still, investors will watch to see whether SK Hynix can again post record revenue and operating profit despite headwinds from a stronger won against the dollar. The South Korean supplier to Nvidia remains a key beneficiary of the AI boom.
--SHAREHOLDER RETURNS: Additional shareholder-return plans will also be in focus. Investors will look for details on cash dividends or further share repurchases during the earnings call, as the company nears completion of its previously announced 40 trillion won buyback program. SK Hynix has pledged to return more than 50% of its cumulative free cash flow to shareholders.
--IPO: Investors will also be watching for updates on SK Hynix's decision to halt its review of a potential U.S. listing of flash-memory subsidiary Solidigm. The company last week shelved the initial public offering plan, citing unfavorable market conditions and recent share-price trends.