The Galaxy Z Flip 4 won’t save Samsung from some bad financials
Inflation. Interest rates. Energy prices. If you’ve seen the charts for these values, you wouldn’t be wrong to suspect a recession on the horizon. That’s bad news for individuals and major corporations alike —including Samsung, which has just weathered a bruising third quarter.
The company has filed initial guidance for the summerestimatingconsolidated sales of 76 trillion Korean won ($53.34 billion) with operating profit of about 10.8 trillion won ($7.5 billion) — a 32% decline year on year. Turnover is worse than what researchers were expecting with a Refinitiv consensus of 11.8 trillion won (viaReuters).
Notably, this would be the lowest quarterly profit recorded by the company since Q1 of last year and the first overall profit decline since Q1 2020 which coincided with a once-in-a-generation global pandemic.
Analysts predict the company’s chip unit was particularly worse off this quarter with a nearly 33% decline in operating profits, predicted to be around 6.8 trillion won ($4.7 billion) based on an average of seven estimates.
To make matters even worse for the South Korean juggernaut, prices of its widely used DRAM chips fell by 14% while the cost of NAND flash chips was down by 13% to 18%, per a wider market estimate provided byTrendForce.
Samsung is not the only company to face less-than-ideal financial forecasts. Chip producer Micron Technology has significantly reduced its investment plans for 2023 in anticipation of a rough next few months.
While the forecast looks bleak for the company’s smartphone division, the recent arrival of theGalaxy Z Fold 4and the Z Flip 4 foldables have bumped the manufacturer’s average selling price for phones. That said, with already-weak demand for Android tablets sagging further, Samsung is also said to be considering a later launch window forits next series of flagship tablets.
It’s unclear if 2023-24 will be any better for the global economy, but a lot of prominent talking heads are not overly optimistic.
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