5:23 am - 11/15/2012

SM Entertainment’s Third Quarter results fall short of analyst expectations

SM Entertainment‘s third quarter results fell short of expectations.

SM Entertainment reported their quarterly report to the Financial Supervisory Service at 2:12 PM KST on the 14th. According to their report, SM Entertainment’s third quarter profit was 11.7 billion KRW (approximately $10.7 million USD). This is a 70% increase compared to the same period last year, but the result was only half of analyst expectations of 20 billion – 23 billion KRW (approximately $18.4 million – $21.1 million USD).

As a result, SM Entertainment stocks fell nearly 15%, and hit its low at 2:25 PM. Analysts at the stock exchange fell into a state of confusion. One analyst said, “I haven’t even seen the report yet, but I don’t even have time to think because people keep calling non-stop. We currently don’t know why this happened.”

SM Entertainment explained that the shortcoming was due to the high production costs for the TVXQ and Super Junior arena tours. However, experts have judged that the reasoning was flawed. One analyst said, “There could be some issues internally if we have this much of a difference.” The arena tour was actually one of SM Entertainment’s largest favorable points. Analysts had predicted that the 3rd quarter earnings would see an explosive increase mainly because of the arena tours as their Japanese tours held earlier in the year brought in an audience of nearly 1,000,000 people.

The resulting shock caused SM Entertainment stocks to drop 14.88% to 58,900 KRW (approximately $54 USD) per share. Not only so, but the drop affected other entertainment companies as well. YG Entertainment dropped 13.86% to a stock price of 64,000 KRW (approximately $59 USD) per share, and other entertainment labels dropped 4 to 8% as well.

Source: Chosun Biz | akp

anyone have any thoughts as to why it was lower than expected? 
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___sasuka 15th-Nov-2012 03:07 pm (UTC)
lmao this is really a surprise?

how about the fact that maxstep is the shittiest song in the history of mankind
love_keiko 15th-Nov-2012 03:39 pm (UTC)
was the video ever released for that? i feel like it may have happened while i was living under a rock during hurricane sandy.
setsuna16 15th-Nov-2012 03:13 pm (UTC)
Well, it has been a fair amount of time since they milked the cash cow that is Girls' Generation in Korea...
markthatcoin 15th-Nov-2012 03:51 pm (UTC)
kazu_kumaguro 15th-Nov-2012 03:22 pm (UTC)
because they overestimated it?
ixion124 15th-Nov-2012 03:27 pm (UTC)
someone tell me how to buy shares while its still cheap
anconeous 15th-Nov-2012 03:33 pm (UTC)
tees2mai 15th-Nov-2012 03:28 pm (UTC)
cause soshi didn't promote anything this year
kamelover101 15th-Nov-2012 11:53 pm (UTC)
Omg will people stop that excuse? They've made 15-20m from Japanese sales alone this year which is added to the total.
markthatcoin 15th-Nov-2012 03:48 pm (UTC)
OT but I really prefer the look of yg family's group portrait to this pink craziness. But I realize that's what happens when you churn out supergroups lol
soramai 15th-Nov-2012 04:18 pm (UTC)
lol this reminds me of the netizenbuzz article about it.


titre ou description

I prefer YG family portrait too.
visual_jaeho 15th-Nov-2012 03:49 pm (UTC)
Because the analysts expectations were ridiculously high. There is no way an entertainement company would make that kind of profit unless they don't pay their artists and staff,especially for a company that invests a lot in all kind of projects.
djlancerock 16th-Nov-2012 09:14 pm (UTC)
they probably expected them not to pay artists and staff
mycorrhizoid 15th-Nov-2012 04:08 pm (UTC)
Yeah, the analyst expectations sound awfully high. Plus Soshi hasn't promoted as a group, SHINee and f(x) haven't released much, and you never know when SME will decide to spend their money on these weird businesses that have little to do with kpop and tend to flop.
cc9095 15th-Nov-2012 04:36 pm (UTC)
Who is soshi?
ideservestars 15th-Nov-2012 04:19 pm (UTC)
bc they're only promoting the majority of their groups japan, people are starting to lose interest, they are only catering to the fandom, songs and mv are just not good anymore, maxstep...

you know i just don't know why :l
ayumikoshiro 15th-Nov-2012 04:33 pm (UTC)
How has TVXQ been doing lately... I haven't heard much news about them. Maybe they're not bringing in as much as expected.
cc9095 15th-Nov-2012 04:40 pm (UTC)
121109 TVXQ are the ‘Album Kings’ for the month of October

Yunho and Changmin of TVXQ have taken the #1 spot in terms of album sales for October.

According to the Gaon Chart, TVXQ’s album ‘Catch Me‘ sold 114,956 copies in October, which was the highest for the month. Adding the 131,882 album sales from September, the total sales adds up to 246,838 copies.

Psy‘s 6th album came second for October with 28,359 copies. Epik High was third with 27,161 copies, and G-Dragon was fourth with 18,722 copies.

Out of all the female artists in the top 10, T-ara‘s ‘T-ara’s Free Time in Paris & Swiss‘ sold the highest and was fifth overall by selling 17,242 copies while miss A‘s ‘Independent Women Pt. III‘ ranked 7th by selling 13,153 copies. Ga In ranked 9th with ‘Talk About S.’ by selling 9,855 copies.

Source: Gaon
credit: allkpop

Edited at 2012-11-15 04:41 pm (UTC)
pepper 15th-Nov-2012 04:46 pm (UTC)
Because SNSD didn't had a comeback this year. Plain and simple.
Also, the quality of their music has been dropping alot since 2010 imo... and TVXQ can't manage to sell over 400k albums anymore so...

Over-saturation of the market too, maybe?
cc9095 15th-Nov-2012 04:53 pm (UTC)
I think even they did comeback, it won't change anything.
erbalurbal 15th-Nov-2012 04:47 pm (UTC)
it's only the third quarter and they had an increase from last year. I think the problem is with the overvalued stock in the kpop market, not SM.
realme21 15th-Nov-2012 05:05 pm (UTC)
Their releases have been out of spectacular this year. Sorry but it's the truth. Messy songs right here and there all from SM entertainment. It's time they change their sound.
minho_lover 16th-Nov-2012 05:20 am (UTC)
No really? All their songs sound the same. Sadly, for me sm is just getting on my nerve
periodpains 15th-Nov-2012 05:22 pm (UTC)
eishastan 15th-Nov-2012 05:22 pm (UTC)
GG didn't make a comeback this year DUH!!!
izabera 15th-Nov-2012 05:23 pm (UTC)
the shares are falling because they're not worshipping the dark lord hard enough
compared to western artists, SME MVs just don't have enough satanic symbols (yet)
lee_chikin 15th-Nov-2012 05:54 pm (UTC)
Let me see...
TS Ent made BAP appear in tv a lot and have 3, I repeat, THREE comebacks.
SM spent a shittone of money on EXO and then left them to rot while BAP took all the attention of the korean public.

Uhuhuh, SM should release a "SM the cookbook" where the eommas of their groups present some recipes and the best cooking inspiring music and then pictures of the idols with aprons and generally being cute. Oh please SM make this happen.
sandra_hall 15th-Nov-2012 06:09 pm (UTC)
that would be amazing
i_need_asagi 15th-Nov-2012 05:55 pm (UTC)
Surprised no one has mentioned exoflop.
erbalurbal 15th-Nov-2012 06:11 pm (UTC)
aren't they one of the best selling rookies this year?
asnindie 15th-Nov-2012 06:47 pm (UTC)
I fucking hate Analysts. Dodgy piece of crap that can cause hysteria for no good reason.

SM probably had a failed venture somewhere and are trying to claim they made losses with concerts (I doubt it) to hide the fact. But most likely it's just that Soshi hasn't released anything this year, I imagine their second album in Japan will make them a tidy profit.

But why people argue over how much money they make is silly, it's not us that are making the money.
waterpulse 15th-Nov-2012 07:13 pm (UTC)
Idk Id be interested why one of, if not the biggest, entertainment companies in sk can't seem to generate profits, but then again that's just me.
dippz 15th-Nov-2012 08:38 pm (UTC)
This is a 70% increase compared to the same period last year, but the result was only half of analyst expectations

And that was the point where I stopped being interested........
boba_holic 15th-Nov-2012 09:20 pm (UTC)
me too.
boba_holic 15th-Nov-2012 09:26 pm (UTC)
Why anyone expected them to make three times as much as last year just boggles my mind. They're not growing THAT much.
bebita19 15th-Nov-2012 11:33 pm (UTC)
Because they haven't whored out SNSD this year at all that's why.
cagallisakura 16th-Nov-2012 12:01 am (UTC)
lol yes let's just shove all the blame onto TVXQ and Super Junior instead of exo WHO HAS ALREADY BEEN LEFT TO DIE. what have they even done this year? has samsung been their only cf deal so far?

maybe if SM made SNSD's jpn singles more worth buying they would sell more -____- (side-eyeing the fuck outta that jpn oh! single, the entire thing was shit; no photobooklet, no card, just a lousy sticker)
jaghatar 16th-Nov-2012 05:08 am (UTC)
all of sm's groups have been active this year except snsd but then again
tts promoted this year from what i am seeing YG will be dominating this year and the next
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