Samsung expects Q4 profit decline to $3.37 bln, lowest in 8 ‎years

Samsung Electronics said on Friday it expects a 69% drop in operating profit for the December quarter to its lowest level in eight years, as the global economic slowdown dampens demand for electronic devices and darkens the outlook for the memory chip industry.

According to Reuters, the world’s largest maker of memory chips, smartphones and TVs estimated that its profits fell to 4.3 trillion won ($3.37 billion) in the October-December period, down from 13.87 trillion won a year earlier.

This represents the lowest quarterly profit for Samsung since the third quarter of 2014 and did not reach the 5.9 trillion won expected by Refinitiv.

“For the memory chip business, the drop in demand in the fourth quarter was larger than expected as customers adjusted inventories… driven by concerns about deteriorating consumer sentiment stemming from continued high global interest rates and weak economic prospects,” Samsung said in a statement.

Samsung added in a short preliminary earnings statement that revenue likely fell 9 percent from the same period a year ago, to 70 trillion won.

Samsung stated that the prices of memory chips also fell more than expected due to the increase in inventory with suppliers

It added that its profits from mobile phones decreased in the fourth quarter of 2022, with the decline in sales and revenues of smart phones due to weak demand resulting from the extended macroeconomic problems.

The fourth-largest company in Asia by market capitalization is set to announce detailed earnings later this month.