Analysts predict a nearly 80% drop in Samsung Electronics Co, Ltd (OTC:SSNLF) third-quarter earnings, primarily due to challenges in the semiconductor segment.
The forecasts anticipate an operating profit of 2.3 trillion Korean won ($1.7 billion), marking a 78.7% decline year-on-year, and revenue of 67.8 trillion won, down by 11.6%.
Samsung, the world’s leading memory chip and smartphone manufacturer, is grappling with falling memory chip prices resulting from an oversupply and reduced demand for smartphones and laptops, CNBC reports.
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The semiconductor business, usually Samsung’s profit generator, is forecasted to incur a loss exceeding 3 trillion won in the third quarter. Despite reducing production to stabilize prices, the third-quarter results will not likely reflect the impact.
However, there are potential positives. Samsung’s display business might experience growth due to the launch of Apple Inc’s (NASDAQ: AAPL) iPhone 15 series, and the smartphone unit could benefit from the release of high-end foldable phones in July.
For the fourth quarter, analysts project an operating profit of 3.8 trillion won, an 11.5% year-on-year decline, indicating a potential recovery. Daiwa’s analyst SK Kim, anticipates an easing inventory glut and rising memory prices. A partnership with Nvidia Corp (NASDAQ:NVDA) to supply advanced memory chips for AI applications could bolster Samsung’s performance. The analyst is optimistic about the opportunities emerging from the growing AI demand in 2024.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
