Samsung’s Q4 operating profit grew 130% in Q4: why shares slipped over 2%?

January 30, 2025 06:28 PM PST | By Invezz

Samsung’s Q4 operating profit grew 130% in Q4: why shares slipped over 2%? — Image source: Invezz

Samsung Q4 numbers and guidance

Samsung reported fourth-quarter revenue of KRW 75.8 trillion ($52.2 billion), slightly above the KRW 75.4 trillion estimated by LSEG SmartEstimate.

Operating profit stood at KRW 6.5 trillion, lower than the KRW 6.8 trillion projected by analysts.

On a year-on-year basis, revenue increased by 12%, while operating profit grew by 130% compared to the same period last year.

However, when compared to the previous quarter, revenue declined by more than 4%, and operating profit dropped by nearly 30%.

Net income for the October-December period rose 22.2% to KRW 7.75 trillion ($5.4 billion) from KRW 6.34 trillion a year earlier.

The results were largely in line with Samsung’s guidance, which had projected fourth-quarter revenue of KRW 75 trillion and operating profit in the range of KRW 6.5 trillion.

For the full year, Samsung reported a revenue of KRW 300.9 trillion, an increase from KRW 258.94 trillion in 2023. Annual operating profit rose to KRW 32.7 trillion, significantly higher than the KRW 6.57 trillion recorded in the previous year.

The company noted that while fourth-quarter revenue and profit declined on a quarter-on-quarter basis, annual revenue was the second-highest on record, surpassed only in 2022.

Samsung stated that it expects earnings to remain under pressure in the near term, particularly due to continued weakness in its semiconductor business. However, it aims to drive future growth through AI-enabled smartphones and other premium product offerings.

The company also highlighted plans for 2025, focusing on advancing AI-related technologies, expanding high-value semiconductor production, and strengthening its presence in premium consumer segments.

Samsung plans to boost sales with new flagship models, including the recently launched Galaxy S25 series.

Samsung’s semiconductor business performance

Samsung’s semiconductor division, which includes its memory chip business, reported an operating profit of KRW 2.9 trillion in the fourth quarter. This marked a more than 25% decline from the previous quarter.

Despite the decline in profit, the segment achieved record-high fourth-quarter revenue of KRW 30.1 trillion, supported by strong demand for advanced memory products used in AI applications. Samsung attributed the drop in profit to:

Higher R&D expenses aimed at securing long-term technology leadership
Initial ramp-up costs associated with increasing production capacity for cutting-edge semiconductor nodes

Samsung is a key supplier of DRAM (dynamic random access memory) and NAND flash memory, both of which are critical for data processing and storage.

However, the company faces growing competition from SK Hynix, which has taken the lead in high-bandwidth memory (HBM)—a type of DRAM optimized for AI workloads and used in applications such as large-scale machine learning models.

Samsung stated that it is adjusting its product mix by reducing production of legacy memory products and increasing the share of high-value memory solutions, including HBM.

The company expects overall memory market demand to recover from the second quarter of 2025, though earnings in the near term are anticipated to remain weak.

Samsung’s smartphone segment Performance

Samsung’s Mobile eXperience (MX) and Networks division, which includes smartphones, tablets, wearables, and related network equipment, saw a sequential decline in revenue and operating profit in the fourth quarter.

This was attributed to the fading impact of new flagship model launches, which had driven stronger performance in the prior quarter.

For the quarter, the division reported:

Revenue of KRW 25.8 trillion
Operating profit of KRW 2.1 trillion

Despite the quarterly decline, Samsung noted that full-year sales of flagship smartphones were strong, supported by double-digit growth in the Galaxy S24 series.

The company also saw increased sales of tablets and wearables, both in terms of shipment volume and overall value.

The post Samsung's Q4 operating profit grew 130% in Q4: why shares slipped over 2%? appeared first on Invezz

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video (Content) is a service of Kalkine Media LLC., having Delaware File No. 4697309 (“Kalkine Media, we or us”) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.