After a terrible financial performance in the first half of 2023, Samsung now seems to be on the path to recovery. The company is expecting its earnings to improve in the third quarter of the year. The Korean firm just reported its earnings guidance for Q3 2023, estimating almost a 260 percent increase in operating profit from the previous quarter.
Samsung estimates a notable increase in profit in Q3 2023
According to Samsung, its consolidated sales revenue for the period between July and September this year will come in at around KRW 67 trillion (approx. USD 50 billion at the current currency exchange rate). That’s an 11.6 percent growth in revenue from the KRW 60.01 trillion it generated in the previous three months (April to June). The revenue is still down 12.7 percent from the third quarter of 2022, though. It made KRW 76.78 trillion during the same period last year.
However, revenue has never been Samsung’s problem. It generated KRW 63.75 trillion in revenue in the first quarter of 2023, but only took home KRW 640 billion. That’s a profit margin of just one percent. Its profit margin in the second quarter was 1.1 percent (a profit of KRW 670 billion out of a total revenue of KRW 60.01 trillion). This time around, Samsung is expecting to rake in a profit of KRW 2.4 trillion (approx. USD 1.8 billion), which marks a 3.6 percent margin.
Considering this, the Korean behemoth appears to be on its path to recovery. It still has a long way to go, though. After all, its profits dropped to a 14-year-low earlier this year. In the first three quarters of 2022, Samsung made a profit of KRW 14.12 trillion, KRW 14.1 trillion, and KRW 10.85 trillion, respectively. Hopefully, the tough times are over and the company will gradually recover the ground it lost over the past few months due to an unprecedented drop in semiconductor earnings.
Samsung’s losses from the semiconductor business have narrowed
For years, the semiconductor business has been Samsung’s cash cow. The vast majority of its quarterly profit came from this business. However, a massive drop in chip prices means the company suffered losses from the division in the first half of 2023. It was the firm’s first-ever loss from semiconductors. This affected the overall operating profit for the two quarters.
Samsung reportedly reduced its chip production in the third quarter to keep costs down, narrowing the losses. The launch of the new foldables, smartwatches, and tablets also helped the company increase its profit from the mobile division. All of this helped it to post a more respectable figure this past quarter. We will get a more detailed breakdown of the Korean behemoth’s Q3 2023 financial performance when it posts the full earnings report later this month.
2023-10-11 15:05:51