Customers bought fewer cell phones and laptops, so Samsung’s quarterly profits fell to their lowest level in eight years.
On Tuesday, the tech giant said that its operating profit for the three months ending in December was 4.3 trillion Korean won, or $3.5 billion. This is 69% less than the same time last year. It said in a statement that sales dropped 8% to just under 70.5 trillion won ($57.3 billion).
It was the lowest quarterly profit for the company since the third quarter of 2014, when its smartphone business lost much ground to other companies.
“The business environment got much worse in the fourth quarter because demand was low and the world economy was slowing down,” Samsung said.
We knew the results would be sad. Analysts had said that falling memory chip prices and fewer orders of consumer devices were to blame for Samsung’s (SSNLF) lackluster performance in a pre-earnings forecast earlier this month.
In a presentation to investors, the electronics company confirmed that “mobile and PC demand was weak” and that its memory chip business had also been hurt because “customers continued to adjust their inventories amid deepening uncertainties.”
Samsung thinks that some of these problems will keep happening in the coming months because of the uncertain state of the world economy. However, it thinks that overall demand will rise again in the year’s second half.
This quarter, smartphone sales will likely drop again compared to last year. This is because “the economy is slowing down in major regions,” the report said.
On Tuesday, Samsung’s stock fell by 3% in Seoul.
There were some good things about it. Samsung said it made 302.2 trillion won ($245.7 billion) in sales for 2022. This was a record high, up from 279.6 trillion won ($227.4 billion) in 2021.
Analysts, however, say that they think the company’s profits will drop again this quarter because the prices of memory chips are still going down.
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