Samsung Electronics Posts Q2 Operating Profit of 600 Billion Won 'Barely' in Black... Lowest in 14 Years (Update)

Lowest Since Q1 2009
LG Electronics Likely to Lag in Q2 Operating Profit

Samsung Electronics announced on the 7th that its consolidated operating profit for the second quarter was preliminarily estimated at 600 billion KRW. Although it barely avoided a loss, this is the lowest quarterly performance since the first quarter of 2009 (590 billion KRW). It is interpreted that it was not easy to increase profits due to the deteriorating semiconductor market conditions and the lack of recovery in global smartphone demand.

The preliminary operating profit of 600 billion KRW for the second quarter announced by Samsung Electronics on this day is a 95.74% decrease compared to the second quarter of last year (4.1 trillion KRW). Sales were 60 trillion KRW, down 22.28% year-on-year. Operating profit was higher than the securities market estimate (consensus) of 281.8 billion KRW, but sales were lower than the estimate of 61.8593 trillion KRW. Samsung Electronics' operating profit was the lowest since the first quarter of 2009 (590 billion KRW). The last time it recorded a loss was in the fourth quarter of 2008 (740 billion KRW).

View of Samsung Electronics Seocho Building in Gangnam-gu, Seoul. [Image source=Yonhap News]

Detailed performance by business division was not disclosed. The securities market believes that the performance of the Mobile (MX) division and others offset the losses in the Semiconductor (DS) division. Dongwon Kim, a researcher at KB Securities, predicted that the DS division posted a loss of 3.3 trillion KRW in the second quarter, while the Mobile Experience (MX) division earned 2.7 trillion KRW, Display (DP) 700 billion KRW, Consumer Electronics (CE) 500 billion KRW, and Harman 300 billion KRW each in operating profit, offsetting the DS division's losses.

Industry insiders believe that considering the increase in DRAM shipments in the second quarter, the semiconductor loss amount likely decreased compared to the first quarter (4.58 trillion KRW). As shipments increased, the scale of inventory valuation losses is expected to have decreased compared to the first quarter.

However, there is also analysis that the MX/Network division's performance slightly declined as the effect of the Galaxy S23 new product launch decreased compared to the first quarter. In the first quarter, the MX/Network division earned 3.94 trillion KRW. In the third quarter, with new product launch news such as the 'Galaxy Unpacked' event scheduled for the 26th, this division's performance is expected to increase. The VD (Video Display) home appliance division is estimated to have improved its performance compared to the first quarter due to new TV products and the peak air conditioner season in the second quarter. The Display division is expected to have posted solid results as demand from major customers, including the U.S. Apple iPhone 15 series launch, increased.

The preliminary operating profit for the second quarter announced by Samsung Electronics on this day is expected to be lower than that of LG Electronics. The securities market estimate for LG Electronics' second quarter consolidated operating profit is 977.9 billion KRW. In the first quarter, LG Electronics also recorded an operating profit of 1.4974 trillion KRW, surpassing Samsung Electronics (640.2 billion KRW).