Samsung’s third-quarter operating profit fell 32% short of expectations as inflation reduced global demand for smartphones, home appliances, semiconductors, electronic devices and the memory chips they contain.
Samsung’s preliminary results were disappointing, leading to a series of profit losses and gloomy forecasts. Samsung’s memory chip shipments are also expected to fall short of previously reduced expectations, and prices could fall further this quarter due to inflation, higher interest rates, and the impact of Russia’s invasion of Ukraine.
The company said in a preliminary earnings release that its estimated profit from July to September fell to 10.8 trillion won ($7.67 billion), the first year-on-year decline in nearly three years, from 15.8 trillion won in the previous year.
With the memory chip business performing worse than forecast and DRAM chips expected to ship a larger percentage less than in the second quarter, smartphone and PC manufacturers are also holding back on new purchases and using up existing inventories, driving down shipments and ushering in an industry downcycle.
Analysts also forecast that Samsung will report weak earnings for at least a few more quarters as memory chip prices continue to fall due to low demand.
The sources for this piece include an article in Reuters.