Samsung Electronics Faces Decline in Operating Profit, while Hyundai Motor Company Sets Records
Samsung Electronics, a leading technology giant, witnessed a staggering 78.89% drop in operating profit compared to the same period last year. In contrast, Hyundai Motor Company is poised to achieve remarkable sales figures and record-breaking operating profit in the third quarter.
Challenges for Samsung Electronics
Due to the slow recovery in NAND memory semiconductor prices and the surge in fixed costs resulting from production cuts, Samsung Electronics is anticipated to sustain a third-quarter operating profit exceeding 2 trillion won. The expected decrease in operating profit is approximately 600 billion won compared to the previous month’s figure of 2.9666 trillion won. Analysts attribute this decline to the delayed recovery in NAND prices and the rise in fixed costs. Notably, just three months ago, experts predicted that Samsung Electronics would earn around 3.6 trillion won. Nevertheless, the outlook for the company appears positive beyond the third quarter. Kim Dong-won, a researcher at KB Securities, explains that Samsung Electronics plans to further reduce production in DRAM and NAND sectors during the third quarter. This strategy is expected to decrease year-end memory semiconductor inventory by more than 50% compared to the second quarter, indicating a clear improvement trend starting from the fourth quarter.
Robust Performance by Hyundai Motor Company and Kia Motors
Securities firms are highly optimistic about the performance of Hyundai Motor Company and Kia Motors. It is forecasted that Hyundai Motor Company will achieve a third-quarter operating profit of 3.4882 trillion won, whereas Kia Motors’ operating profit is expected to reach 2.7898 trillion won. Should these predictions hold true, the combined quarterly operating profit of both companies will surpass 6 trillion won. This impressive performance stems from the soaring demand for high-margin vehicles, including eco-friendly cars and sport utility vehicles (SUVs). Furthermore, the smooth operation of both companies’ manufacturing lines, previously hindered by supply and demand issues of semiconductor components after the COVID-19 incident, has contributed to their success. Expert analyst Kim Gwi-yeon from Daishin Securities highlights the positive prospects for Hyundai Motor Company, citing rising demand and prices, as well as reduced incentives for internal combustion engine vehicles.
Samsung Electronics, operating profit fell 78.89% compared to the same period last year
Hyundai Motor Company is expected to record the highest sales and operating profit in the third quarter
A panoramic view of Samsung Electronics’ semiconductor production line. Photo provided by Samsung Electronics
A panoramic view of the Hyundai Motor Company production line. Photo provided by Hyundai Motor Company
Due to the delay in the price recovery of NAND memory semiconductors and the increase in fixed costs due to production cuts, Samsung Electronics’ third quarter operating profit is expected to remain at a level exceeding 2 trillion won. On the other hand, record-breaking Hyundai Motor Company and Kia Motors are expected to earn an operating profit of over 6 trillion in the third quarter.
According to the consensus (performance forecast) of 23 securities companies compiled by financial information provider FnGuide on the 3rd, Samsung Electronics’ operating profit in the third quarter was 2.2912 trillion won. This is a decrease of about KRW 600 billion compared to KRW 2.9666 trillion a month ago, and is the result of a slower-than-expected recovery in NAND prices and an increase in fixed costs. The securities company’s forecast for Samsung Electronics’ operating profit is falling over time, and three months ago it was predicted that it would have earned about 3.6 trillion. The outlook for the fourth quarter and beyond is bright. Kim Dong-won, a researcher at KB Securities, said, “Samsung Electronics will further expand its DRAM and NAND production cuts in the third quarter, and its year-end memory semiconductor inventory will decrease by more than 50% of its compared to the second quarter.” He added, “It is expected to show a clear performance improvement trend starting in the fourth quarter.” “He explained.
Expectations for the performance of Hyundai Motors and Kia are high. Securities firms predicted Hyundai Motor Company’s third-quarter operating profit would be 3.4882 trillion won and Kia Motors’ 2.7898 trillion won. If all goes as predicted, the quarterly operating profit of the two companies will exceed 6 trillion won. The performance of Hyundai Motor Company and Kia Motors reflects the steady increase in demand for high-margin vehicles such as eco-friendly cars and sport utility vehicles (SUVs). Another positive point is that production has become smoother as supply and demand problems of semiconductor components, which had disrupted the operation of both companies’ manufacturing lines after the COVID-19 incident, have been alleviated. Kim Gwi-yeon, a researcher at Daishin Securities, analyzed Hyundai Motor Company’s third-quarter performance, saying, “Given rising demand and prices, and low incentives for internal combustion engine vehicles, good performance is expected.”
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