The South Korean tech company published its early estimates for the third quarter of 2023 on Wednesday, announcing a 78% drop in profits compared to the same time last year. The results are better than expected.
The world's largest memory chip and smartphone maker estimated its operating profit fell to 2.4 trillion won (€1.69 billion) in July-September, from 10.85 trillion won a year earlier, in a short preliminary earnings statement.
Although such results are not synonymous with good news, they are still better than expected. The third-quarter profit drop is smaller than earlier estimates forecasted, as the battered memory chip market shows early signs of recovering from a severe downturn.
"Although the situation is not great in the chip business... the decline in memory prices is easing, and further drops will be limited," said Ko Yeongmin, an analyst at Daol Investment & Securities.
Though down sharply from last year, Samsung's third quarter profit was well above the first quarter's 640 billion won, the lowest since 2009, and the second quarter's 670 billion won.
A global economic slowdown and high interest rates dampened demand for most consumer goods following a pandemic-driven boom, with consumers holding off on purchasing new smartphones or computers. This forced chipmakers to cut production in an attempt to stem falling prices.
The detailed earnings release is due on 31 October, but Samsung already announced its revenue likely fell 13% from the same period a year earlier to 67 trillion won.
The company's mobile business likely reported an operating profit of around 3 trillion won, similar to last year, according to an average of forecasts from five analysts. The company launched its premium foldable smartphones during the quarter, drumming up sales despite the sluggish global smartphone market.
The third quarter is normally strong for Samsung's mobile and display businesses given that is when it launches its flagship smartphones. Demand for display panels from clients like Apple rises before the debut of the latest iPhone, which was released in September.