Samsung Electronics Forecasts 10-Fold Profit Increase — Update
By Kwanwoo Jun
Samsung Electronics said it expects a 10-fold increase in first-quarter operating profit, fueling hopes of a turnaround in its flagship semiconductor business after four straight quarters of losses.
The South Korean technology giant said in a preliminary earnings report Friday that its operating profit is expected to have risen sharply to 6.600 trillion won ($4.88 billion) from KRW640.00 billion a year earlier. That would be its strongest performance in one-and-a-half years.
The estimate beat a FactSet-compiled consensus forecast of KRW5.406 trillion.
Revenue is forecast to increase 11% to KRW71.000 trillion, it said, marginally below the FactSet consensus estimate.
The company didn't provide further details. It is set to release full quarterly results later this month.
The upbeat earnings guidance comes as analysts expect Samsung's memory-chip business to swing to profit thanks to higher chip prices on brisk demand amid the artificial-intelligence boom.
The company's semiconductor segment, which includes its memory-chip units, had been in the red for a fourth consecutive quarter in the October-December period but on track for a recovery.
Samsung is trying to catch up with rivals SK Hynix and Micron Technology in the race to develop advanced high-bandwidth memory chips, which are essential components for AI and high-performance computing systems.
Late last month, Samsung shares rallied after reports that AI chip giant Nvidia was testing the Korean company's next-generation HBM chips for potential use in its graphics processing units. Samsung declined to comment.
Shares reached a three-year intraday high this week and have risen 8.7% in 2024.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
April 04, 2024 20:23 ET (00:23 GMT)
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