Samsung reported a 96% drop in profits – Kommersant
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South Korean corporation Samsung published preliminary financial data for the second quarter. The company reported a 96% drop in operating profit to 600 billion won ($460 million). This is the lowest quarterly profit since 2009. Samsung’s revenue for the quarter fell 17.4% to 63.75 trillion won ($48.8 billion). The company’s results are in line with the forecasts of analysts polled by Refinitiv. Samsung will publish the final data for the quarter on July 27.
Such a sharp decline in profits is primarily due to a reduction in demand for memory chips. During the pandemic, when the demand for PCs and other equipment increased, manufacturers began to build up stocks of chips. Now, however, these inventories have become more of a problem, provoking a drop in demand for chips and prices for them. Back in April Samsung reported on plans to significantly reduce the production of memory chips.
However, according to analysts, in the medium and long term, the situation is rather in favor of Samsung. Memory chip prices will recover by the fourth quarter, with double-digit growth expected from the second half of 2024, according to Greg Roh, director of research at Hyundai Motor Securities. “Unlike competitors, Samsung is going to support investments in memory chips this year, it will pay off in 2025 with increasing market dominance,” he said.
Samsung shares are down 2.4% today.
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