Samsung’s terrible financial year continues as the company’s operating profit is now down 96% in the first quarter, after a reported miserable fourth quarter.
Samsung’s Terrible Financial Year
Samsung Electronics is having yet another bad quarter as per the company’s own preliminary estimates. And this time around, it is warning that quarterly operating profit decreased 96 percent in contrast to the same period in the previous year, which is worse than the two-thirds plunge it suffered the three months prior. Not even robust sales of the new Galaxy S23 series could overcome such a global plummet in the demand for chips.
The demand for semiconductors has waned since peak Covid as everyone splurged cash on lockdown toys and tools. And right now the global economic slowdown has caused buyers to think twice in regards to buying that next gadget thus resulting in swollen chip inventories for companies such as Samsung. According to experts in h field, prices will fall when there is a case of more supply than demand thus putting the hurt on corporate profits. And you just cannot get a pardon for that.
Samsung Still Made Profit
But you shouldn’t feel too bad for Samsung as it still got to make a ton load of money. Operating profit is estimated at 600 billion won which is about $456 million and it is the lowest it has been in 14 years, as per reports from the Financial Times. It’s just not the same staggering 14.12 trillion Korean won which is about $10.7 billion that was raked in the previous year at this time.
And as a result, the company says that it’s cutting the production of memory chips to a “meaningful level” in a bid to address the oversupply. “We have cut short-term production plans, but as we project solid demand for the mid-to-long term, we will continue to invest in infrastructure to secure essential cleanrooms and to expand R&D investment to solidify tech leadership,” Samsung reportedly said in a statement.
One Bright Spot for Samsung in All of the Recent Development
One bright spot however for the quarter was the new Galaxy S23 series, with reported sales of about 11 million units. And that’s up by 50 percent in contrast to its predecessor, as per reports from Kim Kwangjin of Hanwha Investment & Securities analyst as reported by Bloomberg.
Samsung Will Issue Its Final Financial Statement in a Couple of Weeks
Samsung will however issue its final financial statement in a couple of weeks, but it typically diverges very little, if at all, from the main preliminary guidance.
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