AFP – Samsung Electronics said yesterday it expected third-quarter profits to jump almost three-fold, but fell short of market expectations as it struggled to leverage robust demand for chips used in artificial intelligence servers.
The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia’s fourth-largest economy.
The tech giant said in a regulatory filing that its July-September operating profits were expected to rise to KRW9.1 trillion (USD6.8 billion), up 274.5 per cent from a year earlier.
But that was almost 12 per cent lower than the average estimate, according to South Korea’s Yonhap News Agency, which cited its own financial data firm. It is also down nearly 13 per cent from the firm’s operating profit of KRW10.44 trillion in the previous quarter.
Sales, meanwhile, were seen increasing 17.2 per cent on-year to KRW79 trillion.
Samsung’s management released a rare, separate statement yesterday to its customers, investors and employees, offering its apologies.
“Due to results that fell short of market expectations, concerns have arisen about our fundamental technological competitiveness and the future of the company,” said the statement, signed by vice chairman of the company’s device solutions division Jun Young-hyun.
“Many people are talking about Samsung’s crisis… We will make sure that the serious situation we are currently facing becomes an opportunity for a fresh start.”
Shares in Samsung fell 1.5 per cent in Seoul yesterday.
Senior analyst at Counterpoint Research Jene Park said that there had been “an expected decline” in Samsung’s memory sector.
“The downturn is attributed to delays in the supply of fifth-generation HBM (HBM3E) and a general reduction in memory demand,” Park told AFP.
“In the smartphone business, sales of new foldable devices seem to be below expectations, as competition among foldable suppliers is becoming more intense.”
