Samsung Q4 profit misses forecast on missteps in AI chips
A man walks past a signboard of Samsung Electronics in front of the Samsung Electronics Nano City Hwaseong Campus in Hwaseong, Gyeonggi Province, July 8, 2024. Reuters-Yonhap
Samsung Electronics on Wednesday estimated its fourth-quarter operating profit more than doubled from a year earlier but missed market expectations due to lackluster performance in its high-end memory chips for artificial intelligence accelerators.
The world's biggest maker of memory chips expected an operating profit of 6.5 trillion won ($4.46 billion) for the three months ended in December, up from 2.82 trillion won a year earlier, the company said in a regulatory filing.
But the operating profit is 15.7 percent lower than the average estimate based on a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
On-quarter, operating profit retreated 29.19 percent from 9.18 trillion won.
Among others, decreased sales in Samsung's device solutions division in charge of memory and foundry business units weighed on the quarterly results, the company said in an explanation note.
Also, sluggish demand for conventional PCs, mobile phones and home appliances affected the chip giant's overall performance despite strong sales of high-capacity products for servers, the note said.
Samsung's lower-than-expected operating figure comes amid prolonged delays in securing Nvidia Corp.'s approval for its high bandwidth memory (HBM) chips for AI computing.
Investors are keeping a watchful eye on whether Samsung will be able to catch up with its compatriot rival SK hynix in the HBM market.
Late last year, Samsung made a rare apology for its disappointing results in the chip business division and conducted a major executive reshuffle to put a bigger focus on high-end technologies and overcome ongoing business challenges.
Revenue rose 10.7 percent to 75 trillion won for the October-December period from 67.78 trillion a year earlier. The company did not disclose the data for net earnings in the guidance.
For the whole of 2024, operating profit jumped nearly fivefold to 32.73 trillion won from 6.57 trillion won the previous year, the filing said.
Revenue rose 15.9 percent to 300.08 trillion won from 258.94 trillion won over the mentioned period.
On Wednesday, Samsung Electronics shares jumped 3.43 percent to 57,300 won with local analysts noting its disappointing fourth-quarter figures had already been factored into its share price.
The chipmaker outperformed the broader Korea Composite Stock Price Index's 1.16 percent gain.
Its final earnings results are set to be released later this month. (Yonhap)