SK Telecom (NYSE:SKM) Posts Earnings Results, Beats Expectations By $0.22 EPS

Key Points

• SK Telecom exceeded earnings expectations, reporting quarterly EPS of $0.81 versus the $0.59 consensus estimate. Operating profit climbed 67.3% year over year to KRW 566 billion, while revenue rose 0.5% to KRW 4.36 trillion.
• AI data center revenue surged 92.5%, supported by the Pangyo facility, as the company began construction on a new Seoul data center and planned SK Hyper to develop projects targeting phased capacity expansion toward 5GW.
• Management expects sustained AI infrastructure demand but intends to rely heavily on strategic partners, financial investors and project financing to fund expansion. SK Telecom committed KRW 750 billion to SK Hyper while maintaining its quarterly dividend at KRW 830 per share.

SK Telecom (NYSE:SKM - Get Free Report) announced its quarterly earnings data on Wednesday. The Wireless communications provider reported $0.81 EPS for the quarter, beating the consensus estimate of $0.59 by $0.22, Zacks reports. SK Telecom had a net margin of 2.03% and a return on equity of 2.78%.

Here are the key takeaways from SK Telecom's conference call:

• Operating profit rose 67.3% year over year to KRW 566 billion, aided by the absence of last year’s cybersecurity incident costs, while cost controls also supported a 5.3% quarterly increase. Revenue grew 0.5% to KRW 4.36 trillion.
• AI data center revenue increased 92.5% year over year, driven by the Pangyo facility, and construction began on a new Seoul data center. SK Telecom also plans to establish SK Hyper to develop AIDC projects, initially focusing on securing land, power, customers and infrastructure for phased capacity expansion toward 5GW.
• Management expects sustained, structural AI infrastructure demand as inference workloads and enterprise and public-sector adoption expand. It said global customer discussions are ongoing and intends to fund much of the planned AIDC build-out through strategic partners, financial investors and project financing rather than direct investment.
• SK Telecom committed KRW 750 billion to SK Hyper, including KRW 330 billion planned for this year, but said total investment requirements could rise and specific plans remain dependent on customer requirements, business models and schedules. Management maintained a quarterly dividend of KRW 830 per share and reiterated its goal of balancing AIDC investment with financial soundness and stable shareholder returns.
• The company also plans to contribute to SK hynix’s AI investment vehicle through installment payments, seeking access to AI technologies and global partnerships that could strengthen its data center business. Management expects group-level synergies through SK Telecom’s customer network, SK Broadband’s operating expertise and SK hynix’s AI ecosystem investments.

SK Telecom Trading Up 0.9%

SK Telecom stock traded up $0.32 during mid-day trading on Wednesday, hitting $35.12. 1,764,993 shares of the stock were exchanged, compared to its average volume of 2,199,077. The stock has a market capitalization of $13.48 billion, a price-to-earnings ratio of 58.52, a PEG ratio of 0.20 and a beta of 0.64. SK Telecom has a 12 month low of $19.66 and a 12 month high of $47.18. The company has a quick ratio of 1.15, a current ratio of 1.18 and a debt-to-equity ratio of 0.57. The firm's fifty day simple moving average is $34.85 and its two-hundred day simple moving average is $32.97.

Institutional Trading of SK Telecom

Large investors have recently bought and sold shares of the business. Arrowstreet Capital Limited Partnership lifted its stake in shares of SK Telecom by 2.7% in the 3rd quarter. Arrowstreet Capital Limited Partnership now owns 2,253,677 shares of the Wireless communications provider's stock valued at $48,679,000 after purchasing an additional 60,242 shares during the period. Bank of America Corp DE increased its holdings in SK Telecom by 9.6% in the third quarter. Bank of America Corp DE now owns 886,930 shares of the Wireless communications provider's stock worth $19,158,000 after purchasing an additional 77,763 shares in the last quarter. BNP Paribas Financial Markets lifted its stake in SK Telecom by 0.5% in the third quarter. BNP Paribas Financial Markets now owns 618,787 shares of the Wireless communications provider's stock valued at $13,366,000 after buying an additional 2,894 shares during the period. Millennium Management LLC lifted its stake in SK Telecom by 202.4% in the fourth quarter. Millennium Management LLC now owns 606,347 shares of the Wireless communications provider's stock valued at $12,448,000 after buying an additional 405,863 shares during the period. Finally, Creative Planning boosted its holdings in shares of SK Telecom by 108.0% during the 3rd quarter. Creative Planning now owns 347,750 shares of the Wireless communications provider's stock worth $7,511,000 after buying an additional 180,581 shares in the last quarter.

Wall Street Analyst Weigh In

A number of equities analysts have recently commented on SKM shares. Weiss Ratings cut SK Telecom from a "hold (c+)" rating to a "hold (c)" rating in a report on Wednesday, July 29th. Zacks Research raised SK Telecom from a "strong sell" rating to a "hold" rating in a research note on Tuesday, May 26th. Wall Street Zen upgraded SK Telecom from a "hold" rating to a "buy" rating in a research report on Saturday, July 4th. HSBC upgraded shares of SK Telecom from a "reduce" rating to a "hold" rating in a research report on Thursday, May 7th. Finally, JPMorgan Chase & Co. upgraded SK Telecom from a "neutral" rating to an "overweight" rating in a research note on Thursday, July 16th. One analyst has rated the stock with a Buy rating, four have issued a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the stock presently has an average rating of "Reduce".

About SK Telecom

SK Telecom Co, Ltd. NYSE: SKM is South Korea's largest wireless carrier, offering a comprehensive range of mobile telecommunications services. The company operates 5G, 4G LTE and IoT networks, providing voice, data and messaging solutions to consumers and businesses. Beyond traditional wireless services, SK Telecom delivers fixed-line broadband, digital content platforms, cloud computing and cybersecurity offerings designed to support enterprise digital transformation and the growing demand for high-speed connectivity.

Established in 1984 as Korea Mobile Telecommunications Services, SK Telecom pioneered cellular service commercialization in South Korea and has continually expanded into new technology areas.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source