Samsung’s Q1 earnings guidance reveals a dismal picture, worse than anything observed in the last ten years. The sales forecast is around $48 billion, down by 10% QoQ and almost 20% YoY.
Operating profit is projected to be a meager $455 million, representing a six-fold decrease from the previous quarter and an astounding 95% drop from the $11 billion profit generated during the same period last year.
Samsung announced that it will significantly reduce the production of memory chips due to persistently weak demand. The poor performance of this division has resulted in the worst profit results for the company since 2009, according to Samsung.
At home, Samsung Group is the largest family-owned conglomerate in South Korea, known as a “chaebol.” The company accounts for over 20% of the country’s domestic GDP, exacerbating economic difficulties in the region.
This marks the second consecutive quarter of significant decline, as Q4 2022 saw profits plummet by nearly 70%. Samsung had previously attributed this decline to the war in Ukraine and inflation, but it is evident that the company’s profitable streak in memory chips has come to an end and it must explore other avenues to restore profitability.
Keep in mind that this is only a guidance report and actual results are not here yet. The final results could be a little better than the bleak predictions, but it’s clear that things are not looking good for Samsung for the time being.
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