Despite a good year last year in Australia where sales surged to $2.9B Samsung Electronics ‘has become cautious about where global markets are going after confirming an almost 12% surge in global sales yesterday.

The South Korean business who is punting on foldable phones to give them an edge in the consumer market in the next quarter, delivered a better-than-anticipated 21% jump in global revenue, despite weakening consumer demand and soaring materials costs with their consumer division that makes up the bulk of sales in Australia tipped to fall significantly.
The upbeat earnings, fell slightly short of analysts’ consensus estimates with real concerns entering the market as consumer spending slows Samsung is forecasting a downturn from the second quarter.

Even though Samsung didn’t break down the results of its respective business divisions in its earnings guidance that preceded its more detailed earnings report later this month.

Credit: Samsung

its chip business is believed to have driven up sales overall as demand for its smartphones and home appliances slowed due to consumer belt tightening and retailers cutting back on orders.

The Korean Herald reports that according to analysts’ consensus, its chip business division is estimated to report a 16 percent growth in operating profits to 9.8 trillion won in the April-June period, while smartphone and home appliance business divisions are projected to post almost 30 percent declines in operating profits to 2.6 trillion won and 570 billion won, respectively.

“Consumer sentiment is worsening due to several factors like the Russia-Ukraine war and the lockdown in China’s key cities,” said Do Hyun-woo, an analyst at NH Investment and Securities. “Major smartphone makers are reducing parts purchases to sell off inventories first.”

As for chip business, Nam Dae-jong, an analyst at eBest Investment and Securities, also lowered outlook for operating profits to 56.6 trillion won, citing weaker demand and cheaper prices.

In the meantime, Samsung’s crosstown rival LG Electronics said in the day it projected to post 19.47 trillion won in sales and 791.9 billion won in operating profits in the second quarter this year.

Compared to a year ago, sales were up 15 percent, but operating profits suffered a 12 percent decline.

The figures were slightly lower than earlier analysts’ estimates of 19.52 trillion won and 839.2 billion won.