Samsung Electronics' operating profit falls 34.57% in the fourth quarter, in line with guidance

Samsung emblem displayed on a telephone display screen with a binary code mirrored on it, a laptop computer keyboard, a reminiscence card, an adaper and cables are seen in this illustration picture taken in Krakow, Poland on January 30, 2023. (Photo by Jakub Porzycki/NurPhoto by way of Getty Images)

Jakub Porzycki | Nurphoto | Getty Images

Samsung Electronics on Wednesday posted a 34.57% drop in operating profit in the fourth quarter from a 12 months in the past, in line with its guidance issued earlier this month.

Here are Samsung’s fourth-quarter outcomes versus estimates:

  • Revenue: 67.78 trillion Korean gained (about $51 billion), vs. 69.27 trillion Korean gained anticipated by LSEG analysts
  • Operating profit: 2.82 trillion Korean gained, vs. 3.43 trillion Korean gained anticipated by LSEG analysts

Samsung’s income for the quarter ending December fell 3.8% from a 12 months in the past, whereas operating profit dropped 34.57% in the identical interval.

In its earnings guidance earlier this month, Samsung mentioned it anticipated operating profit for the October-December quarter to be 2.8 trillion South Korean gained ($2.13 billion), down 35% from the identical interval a 12 months in the past when the agency reported an operating profit of 4.31 trillion gained.

Daiwa Capital Markets in a Jan. 9 report mentioned Samsung’s income and operating profit estimates had been “decrease than our market estimates.”

“We assume that reminiscence enterprise earnings improved sharply on elevated reminiscence cargo and costs,” mentioned SK Kim of Daiwa Capital Markets after Samsung’s preliminary earnings.

Samsung is the world’s largest maker for dynamic random-access reminiscence chips that are discovered in client gadgets resembling smartphones and computer systems.

Memory chip costs plummeted drastically final 12 months because of inflationary pressures which have prompted customers to chop again on smartphone and PC purchases, in addition to extra inventories of chips that firms stockpiled throughout the pandemic.

This has hit Samsung’s earnings laborious, with its operating profit plunging 77.6% in the third quarter from a 12 months in the past. Other chipmakers resembling Taiwan’s TSMC and SK Hynix have additionally reported declines in quarterly income.

But the global PC market returned to growth in the fourth quarter, posting a modest year-on-year development of three%, in accordance with international expertise market analyst agency Canalys.

Analysts told CNBC in October that weak demand in the reminiscence trade has bottomed out, as chipmakers have been working down extra inventories by way of manufacturing cuts.

“We count on additional value hikes in 1H24 and a marked rebound in earnings for reminiscence makers in 2H24 and 2025,” mentioned Kim of Daiwa Capital Markets on Jan. 4.

This is breaking information. Please examine again for updates.

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