11 October 2023
If you are covering Samsung’s latest financial results, please find below a comment from Ben Barringer, equity research analyst at Quilter Cheviot:
“On the surface Samsung delivered a weak set of quarterly numbers today, but dig a little deeper and there are signs of life in what has been a difficult market. Sales and revenues were down significantly on the year, but the picture is improving and suggests a trough has been reached. The market has subsequently agreed and the stock is up as a result, despite the numbers looking weak.
“Ultimately Samsung has been a victim of the weak economic environment. Computer memory is a cyclical business and as demand has slumped and pricing has slumped too. Things are starting to bottom out now and market participants will be watching Samsung closely as they are the dominant player in memory and their capex discipline will be a barometer for the rest of the industry. As the market normalises and pricing improves, we expected Samsung to bounce back strongly, particularly given the increasing demand around AI and cloud computing.
“While it is a smaller part of the overall group, the consumer electronics business remains weak, but we expect it to return to growth in 2024 too. Samsung will give more detail on 31st October when it holds its Q3 conference call, when we might get a clearer picture for 2024, but today there are some clear signs of improvement from a quality business.”
