Samsung Q3 operating profits soar to $6.6 bn, miss forecast

South Korea's Samsung Electronics blamed "one-off costs" and a beardown Korean won for a Q3 that saw operating profits autumn abbreviated of expectations. Photo: Jung Yeon-je / AFP
Source: AFP

South Korea's Samsung Electronics said Thursday that its operating profits soared 277 percent on-year to $6.6 cardinal but missed expectations arsenic it struggled to leverage request for chips utilized successful artificial quality servers.

The world's largest representation spot shaper posted an operating nett of 9.18 trillion won ($6.6 billion) "largely owed to one-off costs".

It besides warned successful a connection that "the spot of the Korean won against the US dollar resulted successful a antagonistic interaction connected company-wide operating profit".

Although operating nett astir tripled compared with a twelvemonth ago, it fell abbreviated of marketplace expectations and was down 12 percent compared with the erstwhile quarter.

Revenue roseate 17.35 percent to 79.1 trillion won ($57.2 billion), its highest quarterly record, Samsung said.

The steadfast is the flagship subsidiary of South Korean elephantine Samsung Group, by acold the biggest of the family-controlled conglomerates that predominate concern successful Asia's fourth-largest economy.

Semiconductors are the lifeblood of the planetary economy, utilized successful everything from room appliances and mobile phones to cars and weapons.

The company's semiconductor part reported 3.86 trillion won successful operating profit, a 40 percent alteration from past quarter.

Samsung said its show had decreased owed to "a reduced reversal of inventory valuation nonaccomplishment compared to the erstwhile quarter, one-off expenses specified arsenic the proviso of incentives, and currency effects owed to a anemic dollar".

Rare apology

Samsung has been lagging down South Korean elephantine SK hynix erstwhile it comes to high-bandwidth representation (HBM) chips utilized successful AI chipsets, which experts person blamed for the lacklustre results.

This month, Samsung absorption issued a rare, abstracted apology, acknowledging the institution was facing a "crisis".

"Due to results that fell abbreviated of marketplace expectations, concerns person arisen astir our cardinal technological competitiveness and the aboriginal of the company,

said the statement, which was signed by Jun Young-hyun, vice president of the company's instrumentality solutions division.

"Our absorption volition instrumentality the pb successful overcoming the crisis... We volition marque the superior concern we are presently facing an accidental for a resurgence."

Samsung shares person dropped by 33 percent since their highest successful July and the institution has mislaid implicit $120 cardinal of marketplace worth during that time.

The marketplace capitalization spread betwixt Samsung Electronics and SK hynix reached its narrowest level successful 13 years past week.

Shares successful Samsung roseate 0.3 percent successful Seoul connected Thursday successful aboriginal trading.

The uncommon apology came astir a week aft the tech elephantine said it intended to trim unit successful immoderate of its Asia operations, describing the determination arsenic "routine workforce adjustments".

Bloomberg reported the layoffs could impact astir 10 percent of the workforce successful those markets.

Robust AI demand

For the adjacent quarter, Samsung expects existent request for the representation concern to proceed and aims to "strengthen its concern fundamentals" by normalising inventory levels.

"In the 4th quarter, portion representation request for mobile and PC whitethorn brushwood softness, maturation successful AI volition support request astatine robust levels," it added.

Experts said falling prices successful the representation assemblage could impact Samsung.

However, Samsung is expected to summation shipments of its astir precocious chips adjacent quarter, according to Avril Wu, elder probe vice president astatine TrendForce.

"The company's fourth-quarter profits volition beryllium sustainable," she said.

But if Samsung does not get the certification of its high-capacity HBM3E chips successful time, "it volition unit Samsung's gross nett performance," she added.

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Source: AFP