Samsung Expects 78% 3Q Earnings Drop, Shares Surge


Samsung Electronics is anticipating a 78% decline in operating profit for the third quarter of the year, according to company guidance. The company projects revenue of approximately 67 trillion South Korean won ($50.02 billion) and operating profit of about 2.4 trillion won for the quarter ended September. Compared to the figures from a year ago, this represents a decrease from 76.78 trillion won in sales, and 10.85 trillion won in operating profit.

Despite the significant year-on-year decline, the guidance was slightly higher than analyst expectations. On a quarter-on-quarter basis, the third-quarter revenue is expected to show an 11.5% increase from the second-quarter figure of 60.01 trillion won. Samsung is the world’s leading memory chip manufacturer, providing chips for various products such as laptops and servers. It is also a major player in the smartphone market.

The stock of Samsung surged 3.16% following the release of the guidance. SK Kim, executive director of Daiwa Securities, stated that Samsung is anticipated to experience a meaningful “price recovery” from the second quarter of 2024, emphasizing that the current demand environment is weak, and Samsung is implementing production cuts to address the situation.

Kim also sees the recent announcement allowing Samsung and SK Hynix to ship US semiconductor manufacturing equipment to their Chinese factories without separate US approvals as a positive development. While some restrictions remain, Kim believes this will enable the companies to upgrade their capacity in the medium term, potentially until 2025. The geopolitical move is seen as beneficial for Samsung in the context of the ongoing semiconductor industry dynamics.