Samsung Electronics who moved to lay off staff in Australia recently has said that profits would come in below market expectations, despite the fall in the South Korean business still managed to deliver A$10.06 billion in profits for the three months ending in September.
Samsung’s third-quarter operating profit is up 274.5 percent from a year ago, according to the company’s earnings guidance.
The figure is lower than the consensus by local analysts provided by market intelligence firm FnGuide and this send the Companies shares down.
Yesterday another South Korean tech giant LG Electronics announced a 21% fall in profits despite a big increase in profits from selling advertising and subscription services around their consumer TV’s and appliances.
In India a market that Samsung is looking to grow market share and a Country that the South Korean Company has spent millions investing in new manufacturing operations, the business is locked in a stalemate with striking employees near Chennai, after talks between government officials representing its interests and unions failed yesterday.
Samsung workers and their representatives are not only protesting over pay and working conditions, but also want the company and the government to recognise their Samsung India Workers’ Union. SIWU is backed by the Centre of Indian Trade Unions (CITU).
After hours of talks on Monday, state department ministers still would not recognize the union and said employees’ demands would be addressed only if they returned to work. The strike is in its fifth week.
Samsung management has apologised for the disappointing performance with the fall due in part to falling consumer goods sales and the tech giant lagging its rivals in supplying high-end chips to Nvidia in the booming AI market.
In reporting their latest results Samsung said its AI chip business with an unidentified major customer was hit by a delay, while Chinese chip rivals increased supplies of conventional chips, contributing to the decline in its semiconductor earnings.
“The earnings are a shock compared to what many analysts expected initially,” said Lee Min-hee, an analyst at BNK Investment & Securities.
“I don’t see its earnings improving in the current quarter,” he said, saying it lags SK Hynix in increasing sales of high bandwidth memory (HBM) chips to Nvidia and its high exposure to the Chinese market hurts.
This year Samsung’s share price, is down more than 20% so far this year, yesterday fell 1.3%, underperforming a 0.4% fall in the benchmark KOSPI
The good news is that earnings in its mobile division improved from the preceding quarter on solid sales of its flagship smartphones, while earnings at its display unit grew as its customers, which include Apple, launched new models.
Samsung will announce detailed earnings results on Oct. 31.
In Australia Samsung in its last reported financials reported a 50% fall in profits to $51.185 million at December 2023 Vs $101.245M as of the same period in 2022.
Revenues fell to $2.872 billion Vs $3.375 billion at December 2022.
