Samsung Electronics (KRX:005930) Co Ltd said Friday that it expects fourth-quarter profits to drop by nearly 70% year-over-year amid shrinking demand for memory chips.
That won’t individually drag down the tech sector - Samsung isn’t traded on a US exchange - but it’s nonetheless a sign for strong concern.
The Korean electronics company projects a fourth-quarter operating profit of $3.37 billion, down from nearly $11 billion a year earlier. That’s the firm’s smallest quarterly profit since the quarter of 2014 and short of expectations.
READ: 'Too early' to get back into US tech stocks, says UBS equity chief
Samsung pointed to a significant decline in demand for memory chips and weaker sales of smartphones. That’s troubling news, particularly for the company’s Nasdaq-traded rival Apple Inc (NASDAQ:AAPL).
Samsung is a major supplier of parts to Apple, including tens of millions of OLED displays for the iPhone 14, according to reports.
2022 was a tough year for tech stocks — the Nasdaq Composite fell by one-third — but if these preliminary numbers are any indication, we aren’t out of the woods yet.
Samsung’s full financial statement is expected at the end of the month.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel