Samsung Electronics on Friday announced its earnings guidance for the fourth quarter of 2022, predicting quarterly operating profit to plunge a whopping 69% to 4.3 trillion won ($3.42 billion USD) — reports CNBC.
The forecast represents Samsung’s lowest quarterly profit in eight years, sinking below numbers from Q3 2014. It also misses a collective analyst estimate of 5.9 trillion won from Refinitiv SmartEstimate.
As for overall quarterly revenue, Samsung is expecting a 9% decline from the same quarter last year to 70 trillion won. The tech giant, Asia’s fourth-largest listed company by valuation, will report detailed earnings for Q4 2022 on January 31.
Samsung’s shrinking profits come as two of the company’s main businesses, semiconductors and mobiles, face declining consumer demand due to interest rates and cost of living climbing across the globe and inflation reaching extreme highs.
“For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances…,” Samsung said in a statement.
Samsung didn’t sell as many high-end phones — especially foldable ones — in the quarter as it would have liked, with smartphone sales and revenue falling on the back of waning demand.
The company’s display business also took a hit as Apple, one of Samsung’s biggest customers for both semiconductors and displays, faced disruptions in iPhone 14 Pro production at the world’s largest iPhone assembly plant in Zhengzhou, China.
Analysts are expecting Samsung’s profits to drop further in the current quarter, with the South Korean juggernaut’s chip business possibly facing an operating loss.
