Samsung’s profit plunged 95% to its lowest level since 2009 as chip demand slumps
South Korean electronics giant Samsung’s operating profit plunged in the first quarter as prices for its memory chips continued to fall and demand remained weak.
Here are Samsung’s earnings at a glance in the first quarter:
Revenue: 63.75 trillion Korean won (about $47.6 billion), down 18% year-on-year. That is on par with Samsung’s own guidance of approximately 63 trillion Korean won but below the 63.9 trillion won expected by analysts, according to Refinitiv consensus estimates.
Operating profit: 640 billion Korean won (roughly $478.55 million), down from 14.12 trillion won a year earlier. The company issued guidance earlier this month saying Q1 profit would be 600 billion Korean won.
This is the company’s lowest operating profit since the first quarter of 2009.
US in ‘Worst of Both Worlds’ With High Inflation, GDP Slowdown
The US economy was slowing even before the brunt of any credit crunch stemming from the recent bank failures, while inflation accelerated, highlighting the enormous challenge faced by the Federal Reserve.
Gross domestic product rose an annualized 1.1% in the first quarter, notably less than the median forecast for 1.9% in Bloomberg’s survey, Bureau of Economic Analysis data showed Thursday.
The slowdown was largely driven by an inventory drawdown, with an acceleration in consumer spending providing the main impetus for growth. Still, economists warned that momentum slowed as the quarter progressed, in a warning sign for the current quarter.
Frustratingly for the Fed, the central bank’s preferred core gauge of prices, which excludes food and energy, picked up to 4.9% in the January-through-March period, the quickest pace in a year. Meantime, a separate report underscored enduring strength in the labor market, with weekly jobless claims unexpectedly dropping.
Money supply slumps for fifth consecutive month
In March 2023, the M2 measure of money supply contracted for the fifth consecutive month in the United States (-4.5% over one year). The identification of the main sources of monetary creation/destruction reveals the impact of the restrictive monetary environment and the resulting trade-offs.