Samsung expects 22% drop in Q2 sales to 60 trillion won

Samsung Electronics said that revenue in April-to-June likely fell 22 percent from the same period a year earlier to 60 trillion won.
Galaxy S23 from SamsungThis compares with Samsung Electronics’ sale of 63.75 trillion won in Q1 2023 and 77.2 trillion won in Q1 2022.

Samsung, the world’s largest memory chip and smartphone maker, estimated its operating profit fell 96 percent to 600 billion won ($459 million) in April to June, from 14.1 trillion won a year earlier in a short preliminary earnings report.

This compares with Samsung’s operating profit of 0.64 trillion won in Q1 2023 and 14.1 trillion won in Q1 2022.

It would be Samsung’s lowest profit for any quarter since a 590 billion won profit in the first quarter of 2009, according to company data.

Samsung will release detailed earnings on July 27.

In the January-March quarter, Samsung reported 4.58 trillion won loss in its chip business as memory chip prices fell further and its inventory values were slashed.

In the second quarter, losses in Samsung’s memory chip business likely shrank due to more sales of DRAM chips, used in PCs, mobile phones and servers, analysts said.

“Although memory prices fell, the drop was not as large as feared,” said Park Kang-ho, analyst at Daishin Securities.

“When full earnings are announced, investors will be looking for third-quarter signals – how much effect the production cut will have in the third quarter, any demand recovery, and whether higher-end DRAM and high bandwidth memory (HBM) products are set to improve (Samsung’s) profit mix.”

The memory chip downturn that began last year is expected to hit bottom in the third quarter, analysts said, although the rebound may start small.

“DRAM memory prices are expected to rebound in earnest from the fourth quarter, and double-digit quarterly increases are expected from the second half of 2024,” said Greg Roh, head of research at Hyundai Motor Securities.

“Unlike its competitors, Samsung is expected to maintain its investment in memory chips this year … which will pay off in increased market dominance in 2025.”

In the mobile business, Samsung is expected to unveil its latest foldable smartphones later this month in Seoul, weeks earlier than usual – seen by analysts as a bid to dominate the premium phone market for longer before rival Apple releases its next iPhone.

However, analyst outlooks for Samsung’s mobile profits in the third quarter were mixed as consumer sentiment in the global smartphone market remained weak, despite some recent recovery in economic indicators.