Samsung posted its Q1 earnings guidance, and it shows results bleaker than anything we’ve seen in over a decade. Sales will be between KRW 62-64 trillion (about $48 billion), 10% down QoQ and almost 20% down on a yearly basis.
Operating profit will be just about KRW 0.5-0.7 trillion ($455 million), which is a six-fold decline from the previous quarter and a staggering 95% decline from the KRW 14.12 trillion profit the same time last year.
|(all units in
KRW / USD)
|Q4 2022||QoQ Change||Q1 2022||YoY Change|
|Sales||63 trillion /
|70.46 trillion /
|-10.6%||77.78 trillion /
|Operating Profit||0.6 trillion /
|4.31 trillion /
|-86.1%||14.12 trillion /
Samsung revealed it will scale back production on memory chips significantly due to continuously weak demand. That division is the main reason for the worst profit results since 2009, the Korean company says.
Samsung Group is the biggest family-run conglomerate in South Korea, called “chaebol” at home. The company accounts for over 20% of the country’s domestic GDP, deepening economic woes at home.
This is the second quarter in a row with a massive decline, as Q4 2022 saw profits fall nearly 70%. Back then, Samsung blamed the war in Ukraine and inflation, but it is clear the company’s memory chip golden run has come to an end and it needs to looks elsewhere to restore profitability.