Samsung Electronics expects quarterly profit to fall by 35% – Kommersant

The world’s largest manufacturer of memory microprocessors, South Korean company Samsung Electronics, published preliminary results for the fourth quarter of 2023. As follows from reporting, for the period from October to December 2023, the company’s operating profit is expected to be 2.8 trillion won ($2.13 billion). That’s down 35% from the same period a year earlier and a much larger decline than analysts polled by LSEG expected. Final quarterly results will be published on January 31.

According to preliminary estimates from Samsung Electronics, revenue in the fourth quarter of 2023 will be lower by 4.9% than a year earlier, amounting to 67.4 trillion won ($51.2 billion). Analysts note that behind the drop in performance is weak consumer demand for products that use DRAM memory processors produced by the South Korean company.

According to BNK Investment & Securities analyst Lee Min-hee, quoted Reuters, demand for memory chips did not fall further because Chinese PC and smartphone manufacturers, having used up their own reserves, began purchasing them in large quantities in the fourth quarter. The analyst believes that consumer demand will recover when “interest rates are lowered and the economy is stimulated.” Samsung Electronics shares react to the earnings by falling 2.35%.

Meanwhile, the 35% drop in operating profit last year was not the most significant. So, in third quarter, the year-on-year decline in operating profit amounted to 77.6%, in second — 95%, in first — 96%. The reasons given were the same: first of all, a reduction in demand for memory chips and the accumulation of significant reserves of them at Samsung Electronics itself.

Alena Miklashevskaya