Samsung Projects Profit Decline Despite Steady Sales in Q4

Samsung Electronics Forecasts Operating Profit Decline

SEOUL - Samsung Electronics Co. (KS005930), the renowned South Korean technology giant, has provided its earnings guidance for the fourth quarter of 2024. Despite the company maintaining stable sales figures, it forecasts a decline in operating profits. The anticipated consolidated sales stand at around 75 trillion Korean won, with operating profits estimated to be approximately 6.5 trillion Korean won, according to Korean International Financial Reporting Standards (K-IFRS).

Sales and Profit Estimates Reflect Market Challenges

The figures shared by Samsung represent median values, with actual sales likely to range from 74 trillion to 76 trillion Korean won. The projected margins for operating profit are estimated between 6.4 trillion and 6.6 trillion Korean won. These early predictions remain subject to verification upon completion of an external audit process.

Challenges Within Device Solutions Division

Samsung's Device Solutions (DS) Division is observing a downturn in both sales and profits, primarily due to difficult market conditions, particularly within the IT sector. While the Memory business reported a record high revenue in the fourth quarter, driven by robust sales of high-density products, the operating profit faced a dip. Increased costs associated with research and development (R&D) for future technologies and expenses linked to expanding production capacity in advanced technologies have heavily impacted this division.

Impact of Decreased Demand in Other Divisions

On the other hand, the Foundry and System LSI sectors also reported reduced performance, largely influenced by diminishing demand from pivotal applications like mobile devices, coupled with lower utilization rates and elevated R&D expenditures.

Digital Experience Division's Decline

Additionally, the Digital Experience (DX) Division showed weakened performance, influenced by lower impacts from new mobile product releases and intensified competition within the industry.

Future Prospects Amid Economic Challenges

These anticipatory statements are grounded in current management expectations and are not without their risks and uncertainties. Several factors could lead to actual results varying significantly, including economic conditions, market competitor behavior, currency exchange fluctuations, and regulatory changes. The company has detailed these risks in its filings with the Korea Exchange and Financial Supervisory Service, as well as on its corporate website.

Next Steps for Investors

Investors can look forward to an in-depth discussion of the fourth-quarter results during the upcoming earnings call. This guidance aims to assist investors in understanding Samsung Electronics’ expected financial performance ahead of the official release.

Frequently Asked Questions

What are Samsung's projected sales for Q4?

Samsung projects its consolidated sales for Q4 to be around 75 trillion Korean won.

Why is Samsung expecting a decline in operating profits?

The expected decline in operating profits is due to challenging market conditions impacting the Device Solutions Division.

What challenges is the Device Solutions Division facing?

The division is facing decreased performance due to heightened R&D costs and reduced demand in key applications.

When will the detailed earnings results be available?

The detailed fourth-quarter earnings results will be discussed during the upcoming earnings call.

What factors could impact actual results?

Factors include economic conditions, market performance, competition, and currency fluctuations.

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