Samsung 2Q Guidance – Mixed
Samsung Electronics gave preliminary guidance for 2nd quarter of 77t won ($59.27b US) in sales and 14t won ($10.78b US) in operating profit, with sales slightly above consensus of 76.7t won and OP slightly below consensus of 14.5t won. While Samsung will not give detail until later this month, we expect Samsung’s smartphone division to have seen a drop of between 18% and 19% in profits on a similar decline in smartphone shipments, while Samsung’s semiconductor memory business offset much of that decline.
While Samsung continues to balance weak CE businesses with strong semiconductor sales, we expect 3Q guidance later this month to be a bit less optimistic given the inventory issues Samsung is facing in the TV space and the continuing weakness in the smartphone market and a bit of price pressure in the DRAM space, which will likely give the company a lesser ability to offset CE weakness. We do expect Samsung’s smartphone business to see some momentum as SDC begins to supply iPhone 14 displays in 3Q, particularly as we expect Samsung to have taken back some share from China’s BOE (200725.CH), who we expect to be a bit more limited in how many iPhone 14 units they will be shipping this year, but Samsung’s own demand also needs to pick up, and that will be driven more by macro factors than new smartphone release timing.
While Samsung continues to balance weak CE businesses with strong semiconductor sales, we expect 3Q guidance later this month to be a bit less optimistic given the inventory issues Samsung is facing in the TV space and the continuing weakness in the smartphone market and a bit of price pressure in the DRAM space, which will likely give the company a lesser ability to offset CE weakness. We do expect Samsung’s smartphone business to see some momentum as SDC begins to supply iPhone 14 displays in 3Q, particularly as we expect Samsung to have taken back some share from China’s BOE (200725.CH), who we expect to be a bit more limited in how many iPhone 14 units they will be shipping this year, but Samsung’s own demand also needs to pick up, and that will be driven more by macro factors than new smartphone release timing.
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