Samsung Electronics (GB:SMSN) delivered weak Q4 revenues and operating profit as demand for memory chips nosedived. Samsung’s revenues declined by about 8% year-over-year, while its operating profit plunged approximately 69%.
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The memory chip and smartphone maker said that the operating environment continued to deteriorate due to weak demand and a supply glut. Notably, operating profit in the semiconductor businesses fell about 97%, reflecting lower customer demand amid macro weakness, inventory issues, and a price decline.
Looking ahead, Samsung highlighted that economic uncertainties and ongoing inventory adjustment issues would negatively impact Q1’s performance. As for 2023, Samsung expects demand to fall in the first half and recover in the second half, led by computing and auto.
Is Samsung Stock a Good Buy?
The macroeconomic headwinds could continue hurting consumer demand and Samsung’s near-term financials. Given the short-term challenges, Samsung stock carries a Smart Score of seven on TipRanks, implying a Neutral outlook.
Nevertheless, the company’s dominant positioning in the semiconductor and premium smartphone markets provides a solid foundation for long-term growth. A recovery in demand could give a significant boost to its financials and stock price.