Roundup: Samsung Electronics’ operating profit logs double-digit fall in Q3

SEOUL, Oct. 7– South Korea’s tech behemoth Samsung Electronics logged a double-digit fall in the third-quarter operating profit due mainly to sluggish demand for memory chips, the company said Friday. Preliminary revenue gained 2.7 percent from a year earlier to 76 trillion won in the third quarter, topping 70 trillion won for the fifth consecutive quarter.

SEOUL, Oct. 7 (Xinhua) — South Korea’s tech behemoth Samsung Electronics logged a double-digit fall in the third-quarter operating profit due mainly to sluggish demand for memory chips, the company said Friday.

Preliminary operating profit stood at 10.8 trillion won (7.6 billion U.S. dollars) in the July-September quarter, down 31.7 percent from the same quarter of last year.

It missed market expectations of about 11.7 trillion won (8.3 billion dollars).

Preliminary revenue gained 2.7 percent from a year earlier to 76 trillion won (53.8 billion dollars) in the third quarter, topping 70 trillion won (49.6 billion dollars) for the fifth consecutive quarter.

Net income and detailed earnings on each business unit will be announced later this month after an external audit and the board of directors’ approval.

The lower-than-expected operating profit came as rising worries about global economic downturn weakened demand for tech products, which led to weaker demand for memory chips used to make IT products.

Central banks in major economies raised interest rates in recent months to rein in runaway inflation, boosting worries about economic slowdowns across the globe.

Samsung’s chip-making division was estimated to have recorded an operating profit of between 6 trillion won (4.2 billion dollars) and 7 trillion won (5 billion dollars) in the third quarter.

It was over 30 percent lower than 9.98 trillion won (7.1 billion dollars) in the second-quarter operating profit of the semiconductor division.

Prices for DRAM and NAND flash memory chips were estimated to have slipped over 10 percent in the third quarter compared to the previous quarter.

The semiconductor profit accounts for about two-thirds of Samsung’s total operating profit.

Operating profit for the mobile device business was estimated at some 3 trillion won (2.1 billion dollars) in the third quarter.

It was up over 10 percent compared to the previous quarter thanks to solid demand for foldable smartphones and wearable devices.

Operating profit for the display panel unit was estimated at nearly 2 trillion won (1.4 billion dollars) as the domestic currency’s depreciation to the dollar boosted export proceeds.

Operating profit for home appliances and other businesses was believed to have worsened in the third quarter on the back of weaker demand and higher production costs.

Global energy prices remained high amid the protracted geopolitical risks in Europe.

Market watchers said Samsung’s earnings slump would continue further as the global chip sector entered the down cycle.

Doh Hyun-woo, an analyst at NH Investment & Securities, said in a report that Samsung’s earnings reduction would last until the first quarter of 2023, forecasting a 17 percent slide in the average selling prices for DRAM and NAND flash memory chips in the fourth quarter. Enditem

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