Samsung Electronics has released preliminary estimates for the past quarter, anticipating a decline in operating profit and revenue. The electronics giant predicts a 35% decrease in operating profit at $2.13 billion compared to the same period last year, a figure notably lower than market expectations. Revenue is projected to drop by 4.9% to reach $51.1 billion.
According to Bloomberg, analysts had, on average, expected revenues of approximately $53.6 billion and operating profits of $2.82 billion for Samsung. Industry observers from Counterpoint Research suggest these figures reflect a slower-than-expected recovery in the memory market. The detailed earnings report for Samsung’s fourth quarter of last year is set to be released on January 31st. Despite preliminary data falling short of market expectations, Samsung’s share price increased by 1% during morning trading sessions in Seoul. The unveiling of NVIDIA’s latest products had a more significant impact on the stock market compared to the disappointment from Samsung’s preliminary report.
An analysis by The Futurum Group suggests that Samsung’s financial results could be impacted by low output levels in the semiconductor manufacturing sector, as reported by CNBC. Representatives from Daiwa Capital Markets expressed hope that memory prices had hit their lowest in the fourth quarter and will begin to rebound. They expect memory manufacturers to start feeling the impact of price increases by the second half of this year. Nonetheless, Samsung’s 35% decrease in operating profit seems more manageable when considering second and third-quarter results, which saw a decline of 95% and 77.6% respectively, on a year-on-year basis. Many experts predict a surge in demand for High Bandwidth Memory (HBM) for data accelerators will boost the semiconductor components sector.