Samsung Global Sales Slump, Profits Down 96%, Smartphones Sales Also Rubbery
Samsung Electronics stock has started to slide after the South Korean Company, who is set to launch their new foldable smartphones this month, reported its worst global decline in quarterly revenue since at least 2009, Smartphone sales are down over 9%.
The business that is currently engaged in a TV discount war in Australia reported a 22% decline in overall sales to US$46 billion.
But the really bad news was the 96% plunge in operating profit for the three months ending in June 2023.
The big contributor to the downturn was the significant fall in demand for memory.
Back in April Samsung announced that they were cutting production after reporting its slimmest profit in 14 years, a significant step towards ending the supply glut in memory that is also affecting their competitors.
Samsung will disclose its full earnings report later this month, at this stage their precise details are not clear however, but analysts expect the poor performance of its chip division to be the cause of the profit drop, as it was in the prior quarter.
Inflation and recession fear last year triggered a rapid pullback on consumer and business spending that’s since hammered sales of their products in both Australia and worldwide with Samsung recently offering discounts on TVs appliances and smartphones running into the end of the financial year.
According to Bloomberg investors are cautiously optimistic that the memory chip glut is finally easing after more than a year of price declines.
Management claim that Samsung’s losses are expected to gradually shrink before the company turns a small profit in the fourth quarter.
As for the future Samsung is set to introduce 2-nanometer production for mobile phone parts by 2025 and expand applications for their smartphones.
One area of Samsung’s business that has been hit hard the recession downturn is smartphone sales shipments are estimated to have fallen a quarterly 9% in April-June, according to eBest Investment.
Samsung’s betting on a foldable lineup to shore up its profitability, with plans to unveil the Galaxy Z Fold 5 and Flip 5 on the 26th of July 2023.