What you need to know
- Samsung published its Q3 2023 earnings guidance which sees a 67 trillion Korean won projection in consolidated sales and 2.4 trillion in operating profits.
- The low operating profit number is likely due to Samsung's continued suffrage in the semiconductor space.
- Its full Q3 2023 earnings report should release by October 31 and its assumed the company's turnaround from Q2 is due to its foldable launch.
We're getting later into the year, which means it's time to start reflecting on the Q3 performance of Samsung.
The company posted Q3 2023 earnings guidance, and its consolidated sales number is reportedly sitting at around 67 trillion Korean won. Compared to this same time last year, this is nearly a 13% drop, as Samsung is nowhere near the 76.78 trillion mark. Meanwhile, the company is projecting 2.4 trillion Korean won in operating profits for this year's third quarter.
The operating profits are still extremely low when you consider the Korean OEM once touted 10.85 trillion in revenue one year prior. However, according to Reuters, the Korean company's operating profit guidance beat out analysts' projected 2.1 trillion won estimate.
Still, the lower profit numbers can be attributed to the poor performance of the semiconductor business that Samsung (and Qualcomm) have been going through this year. The OEM stated it was cutting back on its semiconductor output in an attempt to stem the bleeding.
"It's better than expected," states Ko Yeongmin, an analyst at Daol Investment & Securities. "Although the situation is not great in the chip business... the decline in memory prices is easing, and further drops will be limited."
Furthermore, analysts are estimating that Samsung's losses in the semiconductor business "likely shrank" by three trillion won as it veered toward more profitable types of memory like DRAM chips for AI purposes.
Samsung has been suffering quite a turbulent year in terms of revenue and profit. In the first quarter, the company touted its impressive Galaxy S23 series sales despite a sheer plummet in operating profits as it observed a 640 billion Korean won gain (95% decline from Q1 2022). The second quarter was slightly better for its profits, but it was still a 95% drop YoY — with direct ties to the struggles of the semiconductor business.
Samsung is expected to release its official Q3 2023 performance data by October 31. It's assumed that the company's latest release of foldables, the Galaxy Z Flip 5 and Fold 5, will assist in a better turnaround for its revenue. The company has also estimated that it could come to pass as its latest release shattered records.
