The fiscal results for the first quarter of the year will arrive by the end of the month, but in the meantime Samsung has shared its estimates. And they are far from positive: operating profit is expected to fall by 96% compared to the same period last year, from $10.7 billion in 2022 to a likely $455 million this year. Revenue follows the same trend, only with figures and, fortunately for Samsung, also different percentages: 58.99 billion dollars in 2022, 47.8 billion in 2023, down about 19%.
Profits, profit, fall enormously more than revenue, which means that Samsung works with fairly lower profit margins this year or that the most profitable activities are not doing as usual as usual. Much of the difficulties can be explained by the slowdown of what has been Samsung’s locomotive for turnover and profits, that is, the semiconductor division: it cannot be and it is no coincidence that the -96% in front of the profit item takes place in the same period in which the department that deals with chips is at a loss for the first time in 14 years.
Some say that when companies slowed down the purchase of chips for servers and infrastructure, Samsung kept production high, coming to have full or almost full warehouses. The consequences are intuitive: sell at a lower price affecting the profit margin or suspend production for a while, but neither option is zero impact.
To balance the moment no of Samsung Semiconductors we thought the smartphone division, reinvigorated by the numbers of a Galaxy S23 series that evidently liked more than the one that preceded it. If you end up less than 500 million from an operating loss, much of the credit will be the S23 and maybe even the choice to provide a single variant for everyone with Snapdragon chips, which many prefer to Exynos.
The Samsung MX division within which smartphones fall reported profits, according to estimates, of 2.5 billion dollars. The Galaxy S23 has sold well in all the most important markets in the world, in India, Korea, North America and even in Europe, where normally comes the variant with Exynos chip that cools the enthusiasm of those who are more savvy than others. It is said that for the same period the Galaxy S23 have recorded sales 1.4 times higher than the Galaxy S22, and in a market that is going through a moment of deep crisis it is not a trivial signal.
