Most Popular
-
1
Actor Jung Woo-sung admits to being father of model Moon Ga-bi’s child
-
2
Wealthy parents ditch Korean passports to get kids into international school
-
3
Man convicted after binge eating to avoid military service
-
4
First snow to fall in Seoul on Wednesday
-
5
Final push to forge UN treaty on plastic pollution set to begin in Busan
-
6
Korea to hold own memorial for forced labor victims, boycotting Japan’s
-
7
Nvidia CEO signals Samsung’s imminent shipment of AI chips
-
8
Job creation lowest on record among under-30s
-
9
NK troops disguised as 'indigenous' people in Far East for combat against Ukraine: report
-
10
Opposition leader awaits perjury trial ruling
Samsung’s upbeat earnings overshadowed by uncertain outlook
By Lee Ji-yoonPublished : July 7, 2022 - 15:37
Samsung Electronics’ extraordinary win streak over the past three quarters is likely to end in the second quarter this year amid growing uncertainties surrounding the war in Ukraine, rising costs and inflation fears.
In its earnings guidance released Thursday, the South Korean tech giant projected its operating profits at 14 trillion won ($10.7 billion) for the April-June period, up 11.38 percent from a year ago.
Its revenue also jumped 20.94 percent to 77 trillion won, the highest figure for a second quarter revenue.
The upbeat earnings, however, fell slightly short of analysts’ consensus estimates of 77.2 trillion won in sales and 14.69 trillion won in operating profits.
Samsung’s quarterly sales had continued renewing record-highs since the third quarter last year when it reported 74 trillion won in sales. Sales figures grew to 76.6 trillion won in the fourth quarter last year and to 77.8 trillion won in the first quarter this year.
But the figure is expected to take a downturn trend from the second quarter.
Even though Samsung didn’t break down the results of its respective business divisions in its earnings guidance that preceded its more detailed earnings report later this month, its chip business is believed to have driven up sales overall as demand for its smartphones and home appliances is slowing due to consumer belt tightening.
According to analysts’ consensus, its chip business division is estimated to report a 16 percent growth in operating profits to 9.8 trillion won in the April-June period, while smartphone and home appliance business divisions are projected to post almost 30 percent declines in operating profits to 2.6 trillion won and 570 billion won, respectively.
Uncertainties grow over outlook for the remaining months of the year as Samsung will be feeling the pinch of an economic downturn more clearly.
Shinhan Investment adjusted its outlook for Samsung’s annual sales and operating profits to 313.7 trillion won and 58.48 trillion won, down 1.5 percent and 2.7 percent from its earlier estimates, respectively.
“Consumer sentiment is worsening due to several factors like the Russia-Ukraine war and the lockdown in China’s key cities,” said Do Hyun-woo, an analyst at NH Investment and Securities. “Major smartphone makers are reducing parts purchases to sell off inventories first.”
As for chip business, Nam Dae-jong, an analyst at eBest Investment and Securities, also lowered outlook for operating profits to 56.6 trillion won, citing weaker demand and cheaper prices.
In the meantime, Samsung’s crosstown rival LG Electronics said in the day it projected to post 19.47 trillion won in sales and 791.9 billion won in operating profits in the second quarter this year. Compared to a year ago, sales were up 15 percent, but operating profits suffered a 12 percent decline.
The figures were slightly lower than earlier analysts’ estimates of 19.52 trillion won and 839.2 billion won.
In its earnings guidance released Thursday, the South Korean tech giant projected its operating profits at 14 trillion won ($10.7 billion) for the April-June period, up 11.38 percent from a year ago.
Its revenue also jumped 20.94 percent to 77 trillion won, the highest figure for a second quarter revenue.
The upbeat earnings, however, fell slightly short of analysts’ consensus estimates of 77.2 trillion won in sales and 14.69 trillion won in operating profits.
Samsung’s quarterly sales had continued renewing record-highs since the third quarter last year when it reported 74 trillion won in sales. Sales figures grew to 76.6 trillion won in the fourth quarter last year and to 77.8 trillion won in the first quarter this year.
But the figure is expected to take a downturn trend from the second quarter.
Even though Samsung didn’t break down the results of its respective business divisions in its earnings guidance that preceded its more detailed earnings report later this month, its chip business is believed to have driven up sales overall as demand for its smartphones and home appliances is slowing due to consumer belt tightening.
According to analysts’ consensus, its chip business division is estimated to report a 16 percent growth in operating profits to 9.8 trillion won in the April-June period, while smartphone and home appliance business divisions are projected to post almost 30 percent declines in operating profits to 2.6 trillion won and 570 billion won, respectively.
Uncertainties grow over outlook for the remaining months of the year as Samsung will be feeling the pinch of an economic downturn more clearly.
Shinhan Investment adjusted its outlook for Samsung’s annual sales and operating profits to 313.7 trillion won and 58.48 trillion won, down 1.5 percent and 2.7 percent from its earlier estimates, respectively.
“Consumer sentiment is worsening due to several factors like the Russia-Ukraine war and the lockdown in China’s key cities,” said Do Hyun-woo, an analyst at NH Investment and Securities. “Major smartphone makers are reducing parts purchases to sell off inventories first.”
As for chip business, Nam Dae-jong, an analyst at eBest Investment and Securities, also lowered outlook for operating profits to 56.6 trillion won, citing weaker demand and cheaper prices.
In the meantime, Samsung’s crosstown rival LG Electronics said in the day it projected to post 19.47 trillion won in sales and 791.9 billion won in operating profits in the second quarter this year. Compared to a year ago, sales were up 15 percent, but operating profits suffered a 12 percent decline.
The figures were slightly lower than earlier analysts’ estimates of 19.52 trillion won and 839.2 billion won.
