Seoul, March 31 Samsung is expected to report a decline in operating profit for the first quarter, largely due to weak semiconductor performance, a report said on Monday.
The company's operating profit for the January-March period is projected to reach 4.7 trillion won ($3.2 billion), down 27.8 percent from a year ago and also down 26.6 percent from the previous quarter, according to a recent analysis by Yonhap Infomax of earnings forecasts from various brokerage firms.
This, if realised, would mark the third consecutive quarter of a drop in profits for Samsung Electronics. Its operating profit fell from 10.4 trillion won in the second quarter of 2024 to 9.2 trillion won in the third quarter and to 6.5 trillion won for the fourth quarter, reports Yonhap news agency.
The downturn is attributable to lacklustre performance in the company's flagship semiconductor business.
Sluggish demand for information technology (IT) devices and intensified competition in the global memory market weighed heavily on Samsung Electronics, which depends highly on conventional memory chip sales.
Adding to the pressure, sales of high bandwidth memory (HBM) chips are expected to decline due to U.S. export restrictions on semiconductor sales to China.
As a result, Samsung Electronics' semiconductor division is expected to either break even or post a loss for the first quarter.
If the division records a loss, it would be the first time since the first quarter of 2024, when it ended a five-quarter losing streak.
However, analysts anticipate a rebound in the second quarter. A potential recovery in IT device demand, along with major companies completing inventory adjustments, could help Samsung Electronics' profits stabilise.
Brokerage firms predict that the company's operating profit will rise to 5.6 trillion won for the April-June period, compared with the estimated 4.7 trillion won for the first quarter.
"With memory prices stabilising earlier than expected in the second quarter and increasing mobile dynamic random access memory (DRAM) orders from China, Samsung's earnings are expected to improve after hitting a low point in the first quarter," said Lee Soo-rim, an analyst at DS Investment & Securities.
Samsung Electronics will release its first-quarter earnings guidance in early April.
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