Samsung has released its first-quarter earnings guidance, and it’s showing bleaker results than anything we’ve seen in over a decade. Sales will be between KRW 62 and 64 trillion (about $48 billion), 10% lower on a quarterly basis and nearly 20% lower on an annual basis.
Operating profit will be approximately KRW 0.5-0.7 trillion ($455 million), which is a six-fold decrease from the previous quarter and a staggering 95% decline from profit of 14.12 trillion of KRW from the same period last year.
| (all units in KRW/USD) |
Q1 2023 Earnings guide |
Q4 2022 | Quarterly change | Q1 2022 | Change year on year |
| Sales | 63 trillion / 48 billion |
70.46 trillion / 53.48 billion |
-10.6% | 77.78 trillion / 59 billion |
-19% |
| Operational profit | 0.6 trillion / 455 million |
4.31 trillion / 3.27 billion |
-86.1% | 14.12 trillion / 10.7 billion |
-95.6% |
Samsung has revealed that it will significantly reduce the production of memory chips due to continued weak demand. This split is the main reason for the worst profit results since 2009, the Korean company says.
Samsung Group is South Korea’s largest family-owned conglomerate, called “chaebol” at home. The company accounts for more than 20% of the country’s domestic GDP, compounding domestic economic problems.
This is the second consecutive quarter with a massive decline, as the fourth quarter of 2022 saw profits fall nearly 70%. Back then, Samsung blamed the war in Ukraine and inflation, but it’s clear the company’s memory chip gold rush has come to an end and it needs to look elsewhere to restore viability.
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