Samsung Predicts 96% Profits Loss in Q2 2023

The executive director of Daiwa Securities Capital Markets SK Kim said that Samsung may benefit from the US demand.

The past year has been challenging for Samsung Electronics as its semiconductor chip business took a downturn, extending into Q2 2023. The hard time is eating deeply into the South Korean firm’s profits since it generates most of its revenue from the chip businesses. With the current situation, Samsung has released a worrying earnings estimate for Q2 2023, which stresses the persisting weak demand for memory chips. Many companies stockpiled memory chips during the pandemic as there was a spike in consumer devices. However, these companies are now experiencing excess chip investors amid rising inflation, causing consumers to spend less on electronics. This led to a fall in the price of memory chips.

In Q2 2023, Samsung expects quarterly sales to come in at around KRW 60 trillion (about $45.91 billion). It also said operating profits could come in at a meager KRW 0.6 trillion, around $459 million. Previously, it registered 14.1 trillion Korean won in the same period last year. This means that the manufacturer is about to record a 95.74% profit decline compared to the same quarter of the previous year. Also, this would be the second consecutive quarter the electronics corporation would report poor figures. Profits in Q1 2023 fell 96% YoY.

Samsung is about to see its lowest quarterly profits in 14 years with its Q2 2023 expectations. This prediction tallies with analyst expectations of 555 billion Korean won in profits. According to the company’s past earnings data, the last time it recorded such low figures was in Q1 2009. In addition, Samsung’s revenue forecast for Q2 is 63.75 trillion Korean won. The company had 77.2 trillion in revenue last year. This means that the second quarter revenue could drop 17.4% YoY.

The executive director of Daiwa Securities Capital Markets, SK Kim, weighed in on the current market situation for semiconductor chips.

“Demand remained weak. But now the key is the supply [of memory chips]. Samsung Electronics announced the meaningful production cut in early April so we anticipate [that] in the third quarter… With that, we assume that the prices can rebound at the end of this year or early next year,” said the expert.

While Kim noted that Samsung may benefit from the US demand, he also noted the weak demand from China.

Coinspeaker hinted that Samsung Electronics could see massive declines in Q2 2023. The report linked the slow sales to the unpleasant performance of its chip division, which has been the company’s primary source of profit. Samsung shares plunged over 2% in Friday morning trade.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

Source: https://www.coinspeaker.com/samsung-96-profits-loss-q2-2023/