Samsung Electronics says first-quarter profit likely plunged 96% as chip glut slashes prices
The figure was worse than analysts had forecast, as a chip glut worsened and buyers slowed purchases amid a global economic slowdown. This caused the company's stock to drop sharply.
Samsung Electronics reported on Friday a 96% drop in operating profit for the first quarter, which was worse than analysts expected, as a glut of chips worsened, and buyers slowed down purchases due to a global slowdown.
In a brief preliminary earnings statement, the world's biggest memory chip and television maker estimated that its operating profit had fallen to 600 billion won (455.50 millions) from 14.12 trillion won one year earlier.
The company stated that "Memory Demand dropped Sharply... Due to the macroeconomic condition and slowing consumer purchasing sentiment as many customers continued to adjust their inventory for financial reasons."
The profit was below the 873 billion won Refinitiv SmartEstimate - a weighted estimate that favors analysts with a higher level of accuracy. Earlier this week, multiple estimates were revised lower.
Samsung reported that revenue likely dropped 19% compared to the same period last year, reaching 63 trillion won.