Samsung’s operating profit drops for sixth consecutive quarter

January 09, 2024 (MLN): Samsung Electronics Co. posted its sixth straight quarter of declining operating profit, reflecting weak consumer demand and stoking uncertainty over the timing of a broader tech recovery, as Bloomberg reported.

Korea’s largest company reported a 35% fall in operating income to 2.8 trillion won ($2.1 billion), about 24% shy of estimates.

Revenue slid more than anticipated to 67tr won. In all of 2023, Samsung reported its slimmest operating profit in 15 years.

The results underscore how demand for smartphones and the memory chips that power modern electronics remains sluggish given economic uncertainty.

It also muddies the outlook for a market recovery that many investors had hoped would emerge in 2024.

In December, rival Micron Technology Inc. delivered a better-than-projected revenue forecast that suggested datacenter construction may make up for lukewarm computing and mobile device markets.

“This shows that the rebound is slower than we all thought,” said Tom Kang, research director at Counterpoint Technology Market Research. “Prices are not rising that fast and the demand from certain sectors is not that strong.”

Samsung in October predicted the long-depressed $160bn memory market will bounce back gradually in 2024, driven by a boom in AI development.

Prices should start climbing out of troughs around the latter part of 2023, executives said at the time.

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