Samsung Electronics is forecasting a significant increase in operating profit for the first quarter of 2024. The company expects to see a 931% rise in operating profit compared to the same period last year, with profits likely reaching 6.6 trillion Korean won. This surge in profit is primarily attributed to memory chip price hikes and strong sales of the S24. Analysts at Daiwa Securities are optimistic about Samsung’s performance, predicting that the company will surpass market estimates for the quarter. They believe that the AI-driven memory upturn cycle will continue to boost Samsung’s earnings in the coming years, with a positive outlook for 2024-25.
Revenue Growth and Market Position
In addition to the significant increase in operating profit, Samsung Electronics also expects a notable increase in first quarter revenue. The company anticipates an 11.4% rise in revenue compared to the same period last year, with revenue likely reaching 71 trillion won. Samsung’s position as the world’s largest producer of dynamic random-access memory chips has played a key role in driving this revenue growth. The sharp increase in memory chip prices following a period of oversupply and weak demand has been a major contributing factor to Samsung’s improved financial performance.
Industry Outlook and Recovery
The global foundry industry, which includes companies like Samsung and SK Hynix, experienced a rebound in revenue in the fourth quarter of last year. While revenue was up 10% sequentially, it remained down 3.5% on a year-on-year basis. However, industry experts are optimistic about the future, citing signs of recovery in the second half of 2023. Restocking demand in the smartphone and PC sectors has helped boost the industry, signaling a turnaround following a period of economic uncertainties.
Despite macroeconomic uncertainties and challenges in the global market, Samsung Electronics is poised for a strong financial performance in the first quarter of 2024. The company’s focus on memory chip production and sales, along with the success of its S24 model, are expected to drive solid earnings and revenue growth. With analysts offering positive outlooks and market estimates, Samsung is likely to maintain its position as a leader in the technology industry. Investors and industry watchers eagerly await the detailed earnings report from Samsung later this month to gain further insights into the company’s performance.
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