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The South Korean tech giant announced another difficult sales quarter as profits drop to an eight-year low.
Samsung Electronics announced today (6 January) that its profits dropped by over two-thirds in the fourth quarter of 2022. The world’s largest smartphone and memory chip maker earned 4.3 trillion won compared to 13.87 trillion won in the same period in 2021.
This is Samsung’s smallest quarterly profit since 2014 and fell short of analysts’ predictions of around 5.9 trillion won.
The South Korean company attributed the earnings drop to prolonged macroeconomic issues including rising cost of living and interest rates. As a result, the demand for computer chips fell.
“For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances,” Samsung said in a statement.
Also this week, at the Consumer Electronics Show (CES) 2023 in Las Vegas, the company unveiled its “evolved” SmartThings proprietary smart home platform to align with its sustainability strategy announced last September. Samsung’s theme for this year’s CES was ‘Bringing Calm to Our Connected World’ and presented their “approach to combating the climate crisis through innovative technologies”. This eco-conscious tech aims to reduce emissions and boost the energy efficiency of Samsung’s offerings to appeal to climate-concerned consumers in the months and years ahead.
Samsung’s profit plunge comes as other major tech companies expect to announce weak fourth quarter results and predict continued economic challenges in 2023.
Yesterday Salesforce announced it would lay off 10pc of its worldwide staff. In a letter to employees, co-CEO Marc Benioff said: “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions”.
In recent months many other companies have announced layoffs as a result of the economic downturn, including Amazon, Meta, Stripe, Intercom , Shopify, Snap, Patreon and Twilio.
Samsung will release a detailed earnings statement on 31 January.
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