Samsung faces declining profit in Q4

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Samsung faces declining profit in Q4

Last quarter, Samsung Electronics faced a 59% increase in operating profit to $ 10.89 billion, which is in line with analysts’ expectations. The increased demand for smartphones contributed to this – the sales volume increased by about 50%, the older models sold especially well. Samsung does not expect good results from the fourth quarter.

samsung_01
samsung_01

First of all, lower demand for memory from server clients, as well as increased competition in the segment of mobile phones and consumer electronics, will contribute to lower profits in the current quarter, according to a statement from Samsung. Memory prices will also decrease, so in monetary terms, the core business will suffer in the fourth quarter. Unlike the server segment, memory for smartphones, personal computers, and graphics cards will be in high demand in the fourth quarter.

The brand’s smartphone sales should also decline in the fourth quarter, but the supply of displays for Apple products will allow Samsung to offset this trend in one way or another. The next year, according to representatives of the Korean company, will bring revival to the world market of smartphones and memory chips, but the pandemic factor so far adds some uncertainty, as does the tensions between the US and China.

In the third quarter, Samsung managed to increase its profit from the sale of microcircuits by 82%, as in the segment of smartphones the company managed to occupy part of the market positions of Huawei, and the Chinese company itself continued to increase its inventory of components. Samsung Electronics’ revenue rose 8% to $ 59 billion. In the fourth quarter, the company may face a 5% decline in smartphone shipments, analysts say. Competition from Apple will intensify, and the Korean giant itself will not be able to offer new models of smartphones at this moment. Samsung will have to increase its ad spending in an increasingly competitive environment.

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