Samsung announced on Tuesday that it expected a sharp drop in its results for the last quarter of 2023
If the firm’s accounts are not yet in the red, its profits have collapsed in 2023 compared to previous years, which had been exceptionally good. If such a trend was expected, the fall in operating profits of the South Korean company is even worse than expected. A brutal return to reality, which follows a demand which had been greatly inflated during the COVID-19 pandemic.
Profit down 35% compared to last year
Samsung is not yet on the brink of the precipice. But with “only” 1.9 billion euros in operating profit during the fourth quarter of 2023, it recorded a significant slowdown in its activity: this figure represents 35% less than for the same period, a year earlier.
If this figure seems terrible, it is however less worrying than those recorded during the other quarters of 2023: the third quarter recorded a drop of 77% compared to the previous year and the second, a drop of 95%. ! The company’s turnover fell by 5% over the period.
These results, which were communicated during CES 2024 in Las Vegas, were accompanied by announcements of reductions in the production of electronic chips, which had played a large role in the success of the manufacturer in previous years.
At Samsung too, the pandemic distorted the calculations
But these exceptional results from Samsung, like many other tech companies, were also greatly inflated since the COVID-19 pandemic. From this point of view, the smartphone manufacturer was not necessarily the most to be pitied until now, not being as concerned as others by the massive layoffs that have hit the industry for more than a year. . The fact remains that the pandemic had increased demand for electronic gadgets for the home and chip manufacturers were then the kings of oil. But since the end of confinements, demand has fallen while production capacities have increased.
Obviously, by selling fewer chips, and for less money, the announcement of a disappointing 2023 for Samsung should not have surprised many among managers. But it remains even worse than what was anticipated by analysts, whose predictions of around 2.4 billion euros in operating profit for the period were still far too optimistic compared to the 1.9 billion ultimately recorded.
Source : BBC, Capital
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