Samsung just announced its earnings estimate for Q4 2024, and it doesn’t look good. While the company more than doubled its operating profit compared to the same period in 2023, it still fell short of market expectations. It blamed worsening IT-oriented business conditions for underwhelming financial performance.
Samsung blames the market for poor Q4 2024 earnings
According to Samsung’s internal estimates based on the Korean International Financial Reporting Standards (K-IFRS), the company generated a consolidated sales revenue of around 75 trillion Korean won (approx. $51.4 billion) in the fourth quarter of 2024. Its operating profit is estimated at 6.5 trillion Korean won (approx. $4.5 million). That’s a profit margin of 8.7%, which is below average.
More importantly, the estimated operating profit is down nearly 16% from market estimates. Usually, Samsung’s early earnings guidance doesn’t include a detailed breakdown of individual business division performance. The latest official press release also lacks these details, but the company allegedly shared a document with stakeholders shedding light on the weaker results.
Samsung attributed the decline to reduced sales and profit in its memory division, driven by weak market demand for PC products. Non-memory products also faced a downturn during the quarter. Additionally, increased R&D expenses and other overhead costs further impacted the company’s bottom line.
While Samsung didn’t officially address this, reports suggest the company has been unable to secure Nvidia’s certification for its HBM3E AI chips. Allegedly, these chips face thermal issues and have yet to meet Nvidia’s stringent performance standards. It remains to be seen if Samsung can resolve these challenges in the near future.
Meanwhile, the Korean tech giant is also working on HBM4 chips. It plans to begin mass production on its advanced 4nm process later this year. If successful, this could position Samsung as a stronger competitor in the high-bandwidth memory market. The company will publish the full earnings report for Q4 2024 at the end of this month.
