A report on Monday said that Samsung is expected to report a decline in operating profit for the first quarter, largely due to weak semiconductor performance.
According to a recent analysis by Yonhap Infomax of earnings forecasts from various brokerage firms, the company’s operating profit for the January-March period is projected to reach 4.7 trillion won ($3.2 billion), down 27.8 percent from a year ago and also down 26.6 percent from the previous quarter.
If realized, this would mark Samsung Electronics’ third consecutive quarter of a profit drop. Its operating profit fell from 10.4 trillion won in the second quarter of 2024 to 9.2 trillion won in the third quarter and to 6.5 trillion won in the fourth quarter, reports Yonhap news agency.
The downturn is attributable to lackluster performance in the company’s flagship semiconductor business.
Sluggish demand for information technology (IT) devices and intensified competition in the global memory market weighed heavily on Samsung Electronics, which depends highly on conventional memory chip sales.
Adding to the pressure, high bandwidth memory (HBM) chip sales are expected to decline due to U.S. export restrictions on semiconductor sales to China.
As a result, Samsung Electronics’ semiconductor division is expected to break even or post a loss for the first quarter.
If the division records a loss, it would be the first time since the first quarter of 2024, when it ended a five-quarter losing streak.
However, analysts anticipate a rebound in the second quarter. A potential recovery in IT device demand and major companies completing inventory adjustments could help Samsung Electronics’ profits stabilize.
Brokerage firms predict that the company’s operating profit will rise to 5.6 trillion won for the April-June period, compared with the estimated 4.7 trillion won for the first quarter.
“With memory prices stabilizing earlier than expected in the second quarter and increasing mobile dynamic random access memory (DRAM) orders from China, Samsung’s earnings are expected to improve after hitting a low point in the first quarter,” said Lee Soo-rim, an analyst at DS Investment & Securities.
Samsung Electronics will release its first-quarter earnings guidance in early April.
