Samsung Hits with Lowest Annual Profit in Over 15 YEARS

Samsung records lowest annual profit in more than 15 years

Samsung Electronics Co. Ltd. posted disappointing earnings results for the fourth quarter and t

az023, showing a sharp decline in both revenue and profit amid a challenging market environment.

The company faced stiff competition from rivals in the smartphone and memory chip segments, as well as the impact of the global chip shortage and the COVID-19 pandemic.

According to its earnings release, Samsung recorded 67.8 trillion won (about $51 billion) in revenue for the fourth quarter, a 4% decrease from the same period a year ago and slightly below the market consensus of 69.3 trillion won.

Its operating profit also fell by 35% year-over-year to 2.82 trillion won, missing the analyst estimate of 3.43 trillion won.

The company had already warned investors of a weak performance in its earnings guidance earlier this month, citing lower demand for memory chips and smartphones, as well as higher costs for raw materials and logistics.

Samsung also faced legal troubles in several countries, including a $1.5 billion fine from the European Commission for antitrust violations.

Samsung Records Lowest Annual Profit

Samsung Electronics Co. Ltd. has posted its worst annual earnings in over a decade, as the company faced multiple challenges in the global market. The company announced its fourth-quarter and full-year results today, showing a decline in both revenue and operating profit.

In the fourth quarter, Samsung’s revenue was 67.8 trillion won (about $51 billion), a 4% drop from the same period last year and slightly below the market expectation of 69.3 trillion won. The operating profit was 2.82 trillion won, also lower than the projected 3.43 trillion won.

For the whole year of 2023, Samsung’s revenue was 258.93 trillion won, a 14% decrease from 2022, while its operating profit plunged to 6.56 trillion won, an 85% fall. This is the first time since 2008 that Samsung’s annual operating profit was below 10 trillion won.

Samsung said it expects the market conditions to improve in 2024, they will focus on emerging technologies such as artificial intelligence, 5G, and cloud computing, as well as strengthening its leadership in memory chips and displays.

Samsung RAM Records

Samsung is not only the world’s leading smartphone maker and provider of home appliances but also the biggest producer of memory chips.

These chips are used in various electronic devices, such as PCs, smartphones, cars and smart TVs.

The memory chip industry is very volatile and unpredictable, as it was shown by the COVID-19 pandemic.

When the pandemic hit, the demand for memory chips soared, but then it plummeted as the lockdowns eased and the economy slowed down.

Consumers postponed buying new smartphones and PCs due to inflation and uncertainty.

Samsung thinks that the memory chip market is recovering, as global PC sales grew in the last quarter of 2020, after almost two years of decline.

The memory chip division brought in 21.7 trillion won in revenue, but it also suffered an operating loss of 2.18 trillion won.

Does Samsung Recover from Lowest Annual Profit Records

Samsung Electronics made 39.5 trillion won from selling mobile devices and other things. It earned 2.6 trillion won in profit. But it sold fewer smartphones than before. It said people liked its new tablets and watches more.

Samsung hopes to sell more smartphones with its new Samsung Galaxy S24. This phone is very special because it can do amazing things with generative AI. But we don’t know if people will like it or not. Samsung said it already has more than 1.21 million people in South Korea who want to buy it.

Read Also: Amazon New AI DTC Tool: What It Means for Retailers And Customer Experience 2024

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