Samsung flags 35% slip in Q4 2023 profit, misses forecast

Samsung Electronics reported a 35% drop in fourth-quarter operating profit on Tuesday, much worse than analysts expected as weak consumer demand persisted in many of its businesses.

Seoul:Samsung Electronics on Tuesday predicted that its operating profit for the fourth quarter of last year would tumble 35 per cent on year, hurt by persistent weak demand for its mainstay semiconductor division.

Samsung, the world's biggest maker of memory chips and smartphones, estimated its fourth-quarter operating profit at 2.8 trillion won ($2.1 billion), compared with a profit of 4.3 trillion won for the same period of 2022.

The forecast missed the average estimate of 3.9 trillion won from analysts surveyed by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Fourth-quarter sales were also estimated to have declined 4.9 per cent to 67 trillion won, Samsung said in a regulatory filing. For all of 2023, Samsung expected its operating profit to plunge 85 percent to 6.54 trillion won.

It is the first time since 2008, when the global economy was hit by a financial crisis, that Samsung's annual operating profit tumbled below 10 trillion won.

Last year, annual sales were predicted to decline 15 percent to 258.16 trillion won. Shares of Samsung rose as much as 0.65 percent shortly after the announcement. Analysts expected Samsung's semiconductor division to report an operating loss of some 2 trillion won last year.

SK Securities analyst Han Dong-hee told Yonhap Infomax that Samsung belatedly reduced its semiconductor production last year to ease a supply glut. However, Samsung's smartphone division is expected to report a solid profit last year due to strong sales of its flagship handsets, analysts said.

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