Samsung Electronics Q3 Profit Hits Another Record but Falls Slightly Short of Expectations; AI Memory Boom Drives Growth, Yet High Stock Prices and Cyclical Concerns Persist

On October 8th, after KeyBanc upgraded the rating of power equipment manufacturer Generac (GNRC.N) from "sector weight" to "overweight," Generac's stock price rose 1.2% in pre-market trading to $224. The brokerage stated that GNRC's data center power supply agreement with Amazon.com (AMZN.O) validates its position as a leading generator supplier. According to the brokerage, GNRC's management plans to achieve $3 billion to $3.2 billion in data center revenue by 2028 and remains confident in boosting supply chain capacity. KeyBanc also highlighted that, following multiple divestitures of portfolio assets, management continues to maintain a disciplined approach to capital allocation. As of the previous trading day's close, GNRC’s cumulative year-to-date gains exceeded 62%.

INEGI data shows that in September, auto exports fell 12% year-on-year. During the review negotiations of the US-Mexico-Canada Agreement (USMCA), Mexican automobiles continue to face effective US tariffs of 10% to 12%. Domestic auto sales in September grew by 8%, helping to ease pressure on the industry. Sarah Morland, Reuters, Mexico City, October 8 – Data released by the Mexican National Institute of Statistics and Geography (INEGI) on Wednesday showed that the country’s auto exports in September recorded their biggest drop so far this year. Analysts believe this decline is due to US tariff policies—the US is the largest market for this sector in the Latin American country. In September, Mexican auto exports dropped 12% year-on-year, marking the largest decrease since December 2025, while production plummeted by 15%. However, domestic sales grew by 8%, which to some extent eased the pressure on this crucial manufacturing sector. The data was released as government officials are reviewing the US-Mexico-Canada Free Trade Agreement. Even as negotiations continue, Mexican automobiles are still subject to a 25% tariff. Mexican officials estimate that complying with the requirement to use North American-made parts can reduce the tariff burden to 10%-12%. After over thirty years of consecutive free trade agreement signings, the two countries’ economies have become tightly entwined. However, the abrupt policy changes and tariff measures during the Trump administration shook business owners’ trust in long-established supply chains. “This brings greater uncertainty for automakers and impacts production and export decisions,” said Janeth Quiroz, Director of Economic Analysis at Monex. She warned that Mexico’s dependence on the US market represents the biggest risk to the industry. “The September data is a warning, not a crisis signal,” she said. “If this trend continues into 2027, then we may indeed face deeper structural problems in Mexican manufacturing.” Last year, General Motors announced a $4 billions investment to shift some production from Mexico to the US in response to volatile tariff policies. This Chevrolet maker, along with Ford and Nissan, saw a significant drop in exports in September. Mercedes-Benz closed its joint venture plant with Nissan in May last year, and last month did not produce or export any cars—the first time this has happened since the company began shipping overseas eight years ago. However, other companies filled this gap, most notably South Korea’s Kia, Germany’s BMW, and Japan’s Mazda, with Mazda’s exports more than doubling in the month. The main auto industry association in Mexico, AMIA, emphasized at a press conference on Wednesday that Mexico remains the largest source of US auto imports, supplying 16% of light vehicles in an American market that has shrunk by 2% so far this year. AMIA data shows that although exports to the US fell by 5% in the first nine months of 2026, Canada—Mexico’s second largest market—increased its purchases by more than 9%. Alejandra Vargas, an analyst for Ve Por Mas (Bx+), warned that the ongoing slowdown in growth could impact automakers’ investment decisions and affect both Mexico’s manufacturing activity and overall economic growth. “The development of Mexico’s trade relationship with the US in the coming months will continue to be the main factor determining the direction of the industry,” she said.

On October 8, shares of power producer Hallador Energy (HNRG.O) rose 4.9% in pre-market trading to $14.32. The company announced it has signed a six-year capacity and power supply agreement with an investment-grade utility company, covering power supply from June 2029 to May 2035. These agreements are expected to generate approximately $700 millions in revenue over the contract period. With these agreements, the company’s total forward sales will increase to around $3 billions. The contracted capacity and power revenue is expected to rise from $46 per megawatt-hour in 2026 to $73 per megawatt-hour in 2030. As of the close of the previous trading day, HNRG had fallen 28.3% year-to-date.

Reuters, October 8 – PepsiCo (PEP.O) lowered its annual core profit forecast on Thursday and announced further cost-cutting initiatives, warning that efforts to restore growth and profitability in its key North American business are taking longer than expected. This highlights broader challenges in the packaged food industry, where companies like General Mills (GIS.N), McCormick (MKC.N), and Conagra Brands (CAG.N) are increasing promotions and pricing initiatives to stimulate demand while managing rising input costs. PepsiCo CEO Ramon Laguarta stated, "We are developing additional structural cost reduction measures that will be implemented in the coming months to fund investments aimed at accelerating organic revenue growth and mitigating the impact of rising input cost inflation." PepsiCo has been struggling with sluggish performance in its North American business. In the third quarter ended September 5, snack volumes were flat, while beverage volumes declined by 2% compared to the previous year. Despite price reductions of up to 15% for products such as Lay's and Doritos in February, the segment remains a weak spot. Last month, PepsiCo announced it would raise prices for some U.S. products to offset rising costs and improve profitability in North America—a region where profit margins have been hit by affordability initiatives, increased marketing spending, and weak demand. Since Elliott Investment Management disclosed a stake worth about $4 billion in the company last year, PepsiCo has been under pressure to revitalize its carbonated beverage business, boost its stock price, and explore the sale of non-core food assets. Following consultations with Elliott, PepsiCo announced in December it would review its North American supply chain and implement aggressive cost-cutting measures. CFO Steve Schmitt said in prepared remarks, "In North America, we remain committed to improving growth and core operating margin, though it is taking longer than planned." PepsiCo shares rose about 1% in premarket trading. The company now expects core earnings per share growth of 1% to 2% on a currency-neutral basis for fiscal 2026, down from a previously forecast low end of 4% to 6%. Organic revenue is now expected to grow about 3%, compared to a prior forecast of 2% to 4%. According to data compiled by London Stock Exchange Group (LSEG), the company’s quarterly revenue rose 5.6% to $25.27 billion, above analysts’ expectations of $24.96 billion. Quarterly core earnings per share were $2.34, also exceeding the forecast of $2.29. (Reuters provides automated translations of its reports in several other languages for the convenience of non-English speakers. Automatic translations may contain inaccuracies or fail to convey required context. Reuters does not guarantee the accuracy of translations and provides them solely for readers’ convenience. Reuters takes no responsibility for any damages or losses resulting from use of its automated translation features.)