# Samsung’s quarterly profit plunges to 8-year low on demand slump Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-01-06 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Samsung Electronics Co Ltd Quarterly Profit Tumbles to Meta Description: Samsung's profit plummets to an eight-year low due to weak global economy, impacting memory chip prices and electronic device demand. URL: https://financedigest.com/samsungs-quarterly-profit-plunges-to-8-year-low-on-demand-slumphtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-01-06t074929z4lynxmpej040sprtroptp4samsung-elec-results-1736814618143-compressed.jpg) By Joyce Lee and Heekyong Yang SEOUL (Reuters) – Samsung Electronics Co Ltd flagged on Friday its quarterly profit tumbled by two-thirds to an eight-year low as a weakening global economy hammered memory chip prices and curbed demand for electronic devices. The dismal profit estimate by the world’s largest memory chip, smartphone and TV maker – a bellwether for global consumer demand – sets a weak tone for other technology firms’ quarterly results. Samsung’s [profits are expected](https://www.financedigest.com/portuguese-airline-tap-swings-to-profit-earlier-than-expected.html "Portuguese airline TAP swings to profit earlier than expected") to shrink again in the current quarter, analysts said, after the South Korean company announced its October-December operating profit likely fell 69% to 4.3 trillion won ($3.37 billion) from 13.87 trillion won a year earlier. It was Samsung’s smallest quarterly profit [since the third quarter](https://www.financedigest.com/first-quarter-dash-for-cash-largest-since-early-2020-bofa.html "First quarter ‘dash for cash’ largest since early 2020 -BofA") of 2014 and fell short of a 5.9 trillion won Refinitiv SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate. All of Samsung’s businesses had a hard time, but chips and mobile especially,” said Lee Min-hee, analyst at BNK [Investment & Securities](https://www.financedigest.com/ils-investment-returns-continue-to-outperform-according-to-aon-insurance-linked-securities-report.html "ILS investment returns continue to outperform, according to Aon insurance-linked securities report"). Quarterly [revenue likely fell 9% from the same period](https://www.financedigest.com/automotive-condenser-market-to-witness-rise-in-revenues-during-the-period-2020-2030.html "Automotive Condenser Market to Witness Rise in Revenues During the Period 2020 – 2030") a year earlier to 70 trillion won, Samsung said in a short preliminary earnings statement. Asia’s fourth-biggest listed company by [market value will release detailed earnings](https://www.financedigest.com/tech-earnings-hit-pause-button-on-market-rally.html "Tech earnings hit pause button on market rally") on Jan. 31. GRAPHIC: [Samsung profit](https://www.financedigest.com/samsung-profit-likely-lowest-in-more-than-14-years-as-chip-glut-persists.html "Samsung profit likely lowest in more than 14 years as chip glut persists") sinks (https://www.reuters.com/graphics/SAMSUNGELEC-RESULTS/dwpkddoxgvm/chart.png) Rising [global interest rates and cost of living have dampened demand](https://www.financedigest.com/artificial-intelligence-goes-global-demand-for-ai-reaches-four-continents-in-three-months-new-figures-from-synechron-show.html "Artificial Intelligence goes global: demand for AI reaches four continents in three months, new figures from Synechron show") for smartphones and other devices that Samsung makes and also for the semiconductors it supplies to rivals such as Apple Inc. For the memory business, the decline in fourth-quarter [demand was greater than expected](https://www.financedigest.com/merck-kgaa-expects-2023-profit-to-slip-as-covid-demand-wanes.html "Merck KGaA expects 2023 profit to slip as COVID demand wanes") as customers adjusted inventories in their effort to further tighten finances…,” Samsung said in the statement. Its mobile [business’ profit](https://www.financedigest.com/pizza-firm-dp-eurasia-delivers-profit-rise-evaluating-russian-business.html "Pizza firm DP Eurasia delivers profit rise, evaluating Russian business") declined in the fourth quarter as smartphone sales and revenue decreased due to weak demand resulting from prolonged macroeconomic issues, Samsung added. Memory chip prices fell in the mid-20% during the quarter, and high-end phones such as foldable didn’t sell as well,” said BNK Investment’s Lee, adding its display business was hurt due to client Apple’s production delays at the world’s [biggest iPhone factory](https://www.financedigest.com/japans-factory-output-posts-biggest-fall-in-8-months-on-weak-autos-chips-sectors.html "Japan’s factory output posts biggest fall in 8 months on weak autos, chips sectors") in China during the quarter. Three analysts said they [expected Samsung’s profits](https://www.financedigest.com/uks-dominos-expects-tech-investments-to-hit-2023-profit.html "UK’s Domino’s expects tech investments to hit 2023 profit") to dive again in the current quarter, with a likely operating loss for the chips business as a glut drives a further drop in memory chip prices. Samsung [shares closed 1.4% higher](https://www.financedigest.com/asia-shares-creep-higher-wary-on-fed-and-boj-outlooks.html "Asia shares creep higher, wary on Fed and BOJ outlooks") on Friday, versus a 1.1% rise of the wider market. [Shares of rival memory chip maker](https://www.financedigest.com/ubisoft-shares-slump-20-after-french-video-game-maker-warns-on-revenue.html "Ubisoft shares slump 20% after French video game maker warns on revenue") SK Hynix rose 2.1%. The [reason shares are rising despite](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL") the poor earnings result is.. investors are hoping Samsung will need to reduce production, like Micron or SK Hynix said they would, which would help the memory industry overall,” said Eo Kyu-jin, an analyst at DB [Financial Investment](https://www.financedigest.com/how-financial-services-leaders-can-prioritise-cybersecurity-investment.html "How financial services leaders can prioritise cybersecurity investment"). Samsung had said in October that it did not expect much [change to its 2023 investments](https://www.financedigest.com/wealth-tech-is-changing-how-we-invest.html "Wealth Tech is Changing How We Invest"). Analysts said that Samsung has a history of not announcing memory chip production cuts, but could organically adjust [investment by delaying](https://www.financedigest.com/ford-delays-spanish-investments-citing-revised-outlook-for-europe.html "Ford delays Spanish investments, citing ‘revised outlook for Europe’") bringing in equipment or in other ways. ($1 = 1,274.1900 won) (Reporting by Joyce Lee, Heekyong Yang and Hyunsu Yim; Editing by Muralikumar Anantharaman) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---