Inflation. Interest rates. Energy prices. If you've seen the charts for these values, you wouldn't be wrong to suspect a recession on the horizon. That's bad news for individuals and major corporations alike — including Samsung, which has just weathered a bruising third quarter.
The company has filed initial guidance for the summer estimating consolidated sales of 76 trillion Korean won ($53.34 billion) with operating profit of about 10.8 trillion won ($7.5 billion) — a 32% decline year on year. Turnover is worse than what researchers were expecting with a Refinitiv consensus of 11.8 trillion won (via Reuters).
Notably, this would be the lowest quarterly profit recorded by the company since Q1 of last year and the first overall profit decline since Q1 2020 which coincided with a once-in-a-generation global pandemic. Analysts predict the company's chip unit was particularly worse off this quarter with a nearly 33% decline in operating profits, predicted to be around 6.8 trillion won ($4.7 billion) based on an average of seven estimates.
To make matters even worse for the South Korean juggernaut, prices of its widely used DRAM chips fell by 14% while the cost of NAND flash chips was down by 13% to 18%, per a wider market estimate provided by TrendForce.
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