Daijiworld Media Network - Seoul
Seoul, Mar 31: Samsung Electronics is expected to report a decline in its first-quarter operating profit, primarily due to weak semiconductor performance, according to a report on Monday.
Analysts project the company's operating profit for the January-March period at 4.7 trillion won ($3.2 billion), marking a 27.8% drop from a year ago and a 26.6% decline from the previous quarter, as per Yonhap Infomax’s analysis of brokerage firm estimates.
If confirmed, this would be Samsung’s third consecutive quarter of profit decline, following a fall from 10.4 trillion won in Q2 2024 to 9.2 trillion won in Q3 and 6.5 trillion won in Q4 last year.
The slump is attributed to weak demand for IT devices and rising competition in the memory chip market, affecting Samsung's semiconductor division, a key revenue driver. Additionally, U.S. export restrictions on high-bandwidth memory (HBM) chips to China have further pressured sales.
As a result, the semiconductor unit is expected to either break even or post a loss for the first quarter the first potential loss since Q1 2024, when it ended a five-quarter losing streak.
However, analysts foresee a rebound in Q2, with IT demand stabilizing and major firms completing inventory adjustments. Brokerage firms predict operating profit to rise to 5.6 trillion won in the April-June period.
"With memory prices stabilizing earlier than expected and increased DRAM orders from China, Samsung’s earnings should improve after bottoming out in Q1," said Lee Soo-rim, an analyst at DS Investment & Securities.
Samsung Electronics is set to release its first-quarter earnings guidance in early April.