Tech company profits have been declining lately, as evidenced by the latest Q3 earnings reports shared by major players in the industry. Google and Microsoft reported record revenue in their quarterly financials, but profits remained unimpressive, and Samsung is no different either.
The Korean phone maker made an impressive consolidated revenue of $54 billion during the third quarter of 2022, but it also reported a slump in profits compared to the last quarter and year. The company’s operating profit was $7.6 billion during the period, which is a 23% decline from the second quarter and a 31.4% drop over last year.
As for 2021, the operating profits for Q3 were around $11.1 billion, which was a 26% improvement over Q2 2021.
Weak Demand for Phones and TVs
Samsung blames this decline on lower demand caused by global economic instability. The company’s Memory business suffered from weak demand for consumer products and customers’ inventory adjustments. The LSI business also shrunk with lower sales for phones and TVs, but on the bright side, the chip business showed improvement due to more 5G-related production.
Galaxy Z Series to the Rescue
It was the same story with the Display business, with weak demand and higher costs. Samsung’s Mobile Experience (MX) division performed well, on the other hand, reporting $22.6 billion consolidated revenue alongside its Network business. The operating profit stood at $2.27 billion, which was higher than the previous quarter.
This division’s success was credited to favorable sales for the Galaxy Z Flip 4 and Z Fold 4, both of which performed better than their predecessors. The Galaxy S22 series was also able to maintain a “solid sales momentum.”, according to Samsung.
Its Foundry business delivered record earnings with $16 billion in revenue and $3.6 billion operating profit thanks to solid demand from global customers.
Going forward, Samsung expects its mobile business to grow further as demand increases by the end of the year.
