Samsung warns fourth-quarter profit could plunge 35%, misses expectations
Summary
Samsung Electronics on Tuesday said it expects to post a 35% drop in operating profit in the fourth quarter of 2023, missing expectations by a wide margin as a rebound in semiconductor prices likely narrowed losses in the South Korean companys biggest profit-driving segment. The profit guidance fell far short of LSEGs SmartEstimate of 3.7 trillion won, which is weighted more heavily toward expectations of analysts who have been consistently more accurate. Samsung is the worlds largest maker for dynamic random-access memory chips which are found in consumer devices such as smartphones and computers. "We estimate memory prices started to rebound from 4Q23, driven by production cuts by suppliers and a recovery in demand for mobile and PC," said SK Kim, analyst at Daiwa Capital Markets, in a Jan. 4 report. Memory chip prices fell drastically last year, as a result of excess inventories post-Covid and weak demand for end products like smartphones and laptops.