Samsung Expects Its Operating Profit To Drop By 96 Percent, The Biggest In 14 Years, But Company’s Flagship Phone Sales Are Thriving

wccftech.com:

Samsung has probably seen better financial quarters, as Q1 2023 is expected to bring the Korean giant more misery than hope. The company released its earnings guidance for the period, revealing that it will post an operating drop of 96 percent compared to Q1 2022, making it the biggest drop in almost 15 years. Fortunately, the Galaxy S23 helped cushion the blow, as sales of the flagship smartphone lineup helped Samsung avoid even more devastation.

To stave off more financial losses, a Samsung official reportedly stated that the firm is reducing memory chip production by a ‘meaningful’ level as it adjusts to a significant drop in semiconductor demand. As for the operating profit, the company is said to generate only an estimated 600 billion won, or $450 million USD, representing a tremendous hit compared to the same period in 2022.

Its chip division is expected to report a loss of 2.1 trillion won, or $1.6 billion USD, according to analysts’ expectations, suggesting that the cut in memory production will be severe as prices have taken a major beating. According to Samsung, Reuters reports that memory demand dropped because of a weak global economy, with the company’s customers slowing purchases while they focus more on utilizing the stock that is already in their possession.

In the middle of all of these setbacks, Samsung had a guardian angel that somewhat protected the Korean giant from reporting an even bigger loss; the Galaxy S23 series. All three models are said to be selling extremely well, especially when compared to the Galaxy S22 family. It is not difficult to see why these handsets would be popular in several markets.

Last year, when Samsung unveiled the Galaxy S22 lineup, their improvements were likely overshadowed