April 24, 2024

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[THE INVESTOR] Samsung Electronics is anticipated to see an earnings growth slowdown in the fourth quarter, largely due to falling memory chip prices and sluggish demand, according to market analysts on Dec. 27.

Market consensus for the firm’s operating profit stands at 13.97 trillion won (US$12.48 billion), 7.6 percent down from 15.15 trillion won in the same period last year, while the sales estimates came in at 63.83 trillion won, down 3.2 percent on-year. 

The estimated fourth-quarter operating profit decreased by 20.5 percent, compared to 17.57 trillion won in the previous quarter. Some brokerages here were even more pessimistic, forecasting that the operating profit will likely be lower than 13 trillion won.

They attributed the profit decline to the recent price drops of DRAM and NAND flash memory chips, two of Samsung’s main semiconductor products.

“The company’s sales from memory chip and mobile multi-chip module businesses in December was less than half the figure in November,” said Kim Kyung-min, an analyst from Hana Financial Investment, lowering the operating income estimates from the previous 13.3 trillion won to 12.5 trillion won.

Reflecting the anticipated profit decline, Samsung shares have been sliding in recent weeks, hitting an annual low of 38,100 won on Dec. 21.

The tech giant is expected to announce its fourth-quarter earnings in the second week of January. The annual revenue is expected to reach 248 trillion won with operating profit standing at 62 trillion won. It posted revenue of 239.6 trillion won and 53.7 trillion won operating profit last year.

By Kim Young-won (wone0102@heraldcorp.com)