Market is again sluggish, Samsung’s profits have fallen by up to 23 percent
Samsung has reported revenue in the third quarter of 2022, with less than encouraging results as it experienced a 23% decline in profit.
According to the report, the company’s revenue was 76.78 trillion Korean won (USD 54 billion) for the third quarter of 2022, but the decline in profit was already from the previous quarter.
Operating profit was KRW 10.85 trillion or US$ 7.6 billion, down 23 percent from the second quarter of 2022 and about 31.4 percent from the same period last year. Samsung’s operating profit from July to September 2021 was KRW 15.82 trillion, up 26 percent from the previous quarter.
Samsung said its various divisions had been grappling with weak consumer demand amid global economic instability. Weak demand for consumer products also led to a decline in Samsung’s profit.
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The company’s LSI business revenue also fell due to weak demand for mobile phones and TVs, although revenue from chip sales grew due to increased production of 5G smartphones.
In addition, the Samsung Visual Display business was also affected by low demand and rising production costs.
However, Samsung’s Mobile eXperience (MX) business fared slightly better, along with its network business, posting consolidated revenues of KRW 32.21 trillion (USD 22.6 billion) and operating profit of KRW 3.24 trillion (USD 2.27 billion). This achievement was higher than the previous quarter.
The company attributes the success of the MX business to sales of their recently launched foldable smartphones, the Galaxy Z Fold 4 and Z Flip 4, both of which showed stronger growth than their predecessors. Likewise, the Galaxy S22 series was able to maintain solid sales momentum.
Samsung expects its mobile phone business to perform better in the fourth quarter, due to typically demand for smartphone and device wearabel increased at the end of the year.
Samsung’s mobile phone business may continue to make solid profits. Another division that performed well in the third quarter was the Foundry business, which generated record revenues of up to KRW 23.02 trillion or US$16 billion with an operating profit of KRW 5.12 trillion or USD 3.6 billion, thanks to strong demand from global customers.
On the same day that it released its third-quarter earnings, Samsung also officially appointed Jay Y. Lee as its executive chairman. This appointment is considered only a symbolic move, considering Lee is the leader in fact company.
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But, as noted Bloomberg, the job title can help him make things smoother. Especially as he closed deals with other companies around the world in a bid to expand Samsung’s semiconductor and biotechnology businesses.
Lee, who was sentenced to five years in prison in 2017 after being found guilty of bribing public officials, received a presidential pardon in August in order to help South Korea overcome the economic crisis. [FY/HBS]
