Hong Kong
CNN
—
Samsung posted its fourth straight quarter of slumping earnings on Wednesday, capping off a dismal 12 months that additionally noticed it lose its crown because the world’s prime smartphone maker.
The South Korean tech large posted a 35% drop in revenue on Wednesday, in an indication of how demand for client gadgets and the chips that energy them proceed to stay sluggish.
The corporate stated its working earnings declined to 2.8 trillion received (virtually $2.1 billion) within the December quarter, compared with 4.3 trillion received ($3.5 billion) a year earlier, and roughly consistent with its earnings forecast shared earlier this month.
Regardless of that, Samsung is optimistic a couple of resurgence in demand for cellular gadgets this 12 months.
The corporate advised traders that it anticipates the smartphone market to rebound in 2024, notably with the rollout of latest merchandise, akin to AI-powered smartphones, set “to drive an enchancment in demand.”
Samsung, which has additionally lengthy been the world’s main vendor of smartphones, was overtaken by Apple (AAPL) within the fourth quarter, sometimes a peak time for retailers due to the year-end vacation purchasing season.
In response to market research firm IDC, the iPhone maker held 20.1% of worldwide market share in 2023, simply above Samsung’s 19.4%.
The South Korean agency has acknowledged “decrease smartphone gross sales” through the fourth quarter, although it famous a pickup in demand for high-end smartphones in comparison with the earlier three months. Tablet gross sales additionally jumped as prospects have been enticed by new product launches, it stated.
Samsung is combating headwinds on quite a few fronts. After a historic supply shortage throughout Covid, demand for semiconductors has fallen over the previous 12 months as client demand for electronics stays weak over international financial uncertainty. That’s pushed enormous losses for Samsung, the world’s largest reminiscence chip maker.
On Wednesday, the agency posted a lack of 14.9 trillion received (roughly $11.2 billion) for its machine options unit, which incorporates the reminiscence chip enterprise, for 2023, in comparison with a revenue of 23.8 trillion received ($17.8 billion) the earlier 12 months.
This 12 months, nevertheless, the market is predicted to get better steadily, “regardless of numerous potential obstacles, together with rate of interest insurance policies and geopolitical points,” Samsung stated in a statement Wednesday.
The corporate managed to command increased costs for reminiscence chips within the fourth quarter in comparison with the earlier quarter, displaying a slight “improved efficiency,” it added.
Samsung warned that it could proceed to face challenges, nevertheless. “As ongoing macroeconomic uncertainties are anticipated to weigh on the enterprise surroundings within the near-term, the corporate expects earnings within the first half of 2024 to indicate a average enchancment, with a extra important enchancment anticipated to happen within the second half of the 12 months,” it stated.
Samsung shares dipped 1.6% in Seoul on Wednesday.