SEOUL– Samsung Electronics Co. said Friday its fourth-quarter operating profit likely plunged 69 percent from a year earlier due to lower demand for chips, handsets and home appliances amid recession worries.
The world’s largest memory chip and smartphone maker estimated its October-December operating profit at 4.3 trillion won ($3.4 billion), down from 13.87 trillion won a year ago.
Samsung reported a quarterly operating income of less than 5 trillion won for the first time in eight years after posting 4.06 trillion won for the third quarter of 2014.
“With external business environments set to remain uncertain, chip sales plummeted due to lower demand from server clients, data centers and handset makers,” Samsung Electronics said in a statement.
Chip suppliers, including Samsung Electronics, SK hynix Inc. and Micron Technology, Inc., readjusted their inventories during the fourth quarter, further driving down chip prices, it said.
Smartphone and home appliance sales also declined due to decreased consumer spending amid mounting worries over a global recession this year, Samsung said.
Sales likely fell 8.6 percent on-year to 70 trillion won in the December quarter from 76.57 trillion won a year earlier, the company said.
For the whole of 2022, its operating profit likely fell 16 percent to 43.37 trillion won from 51.63 trillion won the previous year.
But sales likely rose 7.9 percent to 301.77 trillion won from 279.6 trillion won during the same period. It is the first time the Korean chip giant to report sales of over 300 trillion won.
As of 9:35 a.m., shares in Samsung Electronics were trading flat at 58,200 won following the release of the quarterly results. The broader KOSPI rose 0.08 percent to 2,266.44.
Samsung is due to release its final earnings report on Jan. 31.
Source: Yonhap News Agency