Samsung Electronics said on Friday its quarterly profit fell two-thirds to its lowest level in eight years as a weaker global economy drove down semiconductor prices and dampened demand for electronics.
The South Korean company said its October-December operating profit probably fell 69 percent to 4.3 trillion won (3.23 billion euros), from 13.87 trillion won a year earlier.
It was Samsung’s smallest quarterly profit since the third quarter of 2014.
Quarterly revenue likely fell 9 percent from the same period a year earlier to 70 trillion won, Samsung said in a preliminary earnings statement, details of which will be released on January 31. .
Rising global interest rates and the cost of living have dampened demand for smartphones and other devices made by Samsung, as well as semiconductors it supplies to rivals such as Apple.
“For the memory business, the decline in demand in the fourth quarter was greater than expected as customers adjusted inventory as part of their cost reduction efforts,” Samsung said in its statement.
Profit from the group’s mobile phone business fell in the fourth quarter as smartphone sales fell on weak demand stemming from protracted macroeconomic problems, Samsung added.
Samsung shares closed up 1.4% on Friday, against a 1.1% gain for the Seoul Stock Exchange’s KS11 index.
“The reason for the stock’s rise despite the poor results is that investors hope that Samsung will have to cut production, as Micron or SK Hynix announced, which would help the chip industry as a whole,” Eo said. Kyu-jin, an analyst at DB Financial Investment.
(Report Joyce Lee, Heekyong Yang and Hyunsu Yim; French version Augustin Turpin, edited by Blandine Hénault)