Samsung Electronics on Tuesday estimated its third-quarter operating profit jumped nearly four-fold, but fell short of analysts’ projections, prompting the tech giant to issue a rare apology for lagging behind competitors in the rapidly expanding AI chip market.
The company reported a preliminary operating profit of approximately 9.1 trillion won ($6.8 billion) for the quarter ending September 30, missing the 10.3 trillion won forecast by LSEG SmartEstimate.
This marks a significant improvement of 274% from 2.43 trillion won in the same period last year, but a decline from the 10.44 trillion won posted in the previous quarter.
Samsung’s estimated Q3 revenue stood at 79 trillion won, below market expectations of 81.57 trillion won, Reuters reported.
The world’s largest memory chip, smartphone and TV maker, Samsung, plans to provide a full financial statement with net income and divisional breakdowns later this month.
Young Hyun Jun, Vice Chairman, Device Solutions Division, Samsung Electronics said that the company will review its organizational culture and processes and rather than relying on short-term solutions, it will focus on reinforcing long-term competitiveness.
“We have caused concerns about our technical competitiveness, with some talking about the crisis facing Samsung,” Jun said. “As leaders of the business, we take full responsibility for this.”
“These are testing times,” he said, pledging to turn the challenge into an opportunity and focus on enhancing long-term technological competitiveness.
Samsung said in a statement that the earnings declined in its memory chip business as Chinese chip rivals increased supplies of “legacy products” and some mobile customers adjusted inventories, offsetting solid demand for high bandwidth memory (HBM) and other chips used in servers, Reuters reported.
Samsung’s share price has fallen more than 20% so far this year. The stock fell 1.4% after the earnings guidance.
(With inputs from Reuters)
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