The big South Korean CE and appliance manufacturers Samsung and LG Electronics are reporting mixed results with Samsung profits expected to have fallen 35% in the fourth quarter as sales slow meanwhile LG Electronics expects its fourth-quarter operating profit to jump, on the year but slump sequentially, as it struggled with delayed demand recovery for home appliances.
LG Electronics claims that they expect an operating profit of US$237.8 million for the October-December quarter.
During the same period and due in part to a prolonged slump that has seen their mobile phone, appliance and TV businesses come under pressure, inflation problems continue to affect Samsung the world’s biggest memory chipmaker however a significant improvement from the third quarter with a boost from memory chip demand indicates that 2024 is looking brighter for Samsung with the Company revealing an array of new products at CES.
Samsung has issued guidance showing that it expects operating profit to have totalled to $2.1 billion for the three months through December. Revenue, meanwhile, is pegged at 67 trillion won, down 4.9% from the previous year.
“Poor performance in the system semiconductor sector continued as demand for smartphones recovered slowly,” Samsung said in a text message to reporters after releasing the guidance. “Improvement in foundry operations was insufficient as well. In memory, performance improved significantly from the previous quarter as we dealt with rising demand for advanced products.”
LG Electronics has continued where they left off the last quarter despite LG Display losing millions with a strong performance in 2023, setting new records in sales for the third consecutive year and achieving significant growth in the last quarter.
On the bright side, Samsung’s guidance showed quarterly profit likely increased 15.2% with revenue down just 0.6% from the previous three months.
For all of 2023, Samsung said operating profit fell 84.9% to 6.5 trillion won from the year before, while revenue dropped 14.6% to 258.2 trillion won.
The company will announce its full earnings report, including new profit, later this month and host a conference call to explain the issues the business is facing.
Analysts say Samsung’s performance will improve further in 2024 due to a recovery in chip prices and the boom in artificial intelligence, both of which have increased demand for high-bandwidth memory semiconductors.
