Samsung Q1 2023 earnings highlight 'successful' Galaxy S23 sales amid huge drop in profits

What you need to know

• Samsung reported its earnings for the full first quarter of 2023.
• The company generated KRW 63.75 trillion in consolidated revenue but only KRW 640 billion in operating profit.
• The Galaxy S23 series, and specifically the Galaxy S23 Ultra, did well in the preliminary quarter.
• While the second quarter of 2023 may continue to be slow for the Korean OEM, it is hoped that the second half of the year will be better overall.

As we head into a whirlwind month of April, Samsung reveals how it fared at the top of the year. Earlier this month, Samsung posted its earnings guidance for the previous quarter. The Korean OEM has now been published (Opens in a new tab) its full earnings report for the first quarter of 2023, which reflects much of what its guidance indicated. Samsung states that the company reported KRW 63.75 trillion (US$45.57 million) in consolidated revenue, down 10% from the fourth quarter of 2022 but down nearly 20% from the same period last year.

The company’s operating profits were a cause for concern in its guidance report and continue to be a cause for concern in its earnings report. Samsung reported an operating profit of just KRW 640 billion (US$477 million), which is nearly 95% of the free fall from the first quarter of 2022, citing lower demand for its DS (Hardware Solutions) division.

The Korean OEM has grappled with declining demand for semiconductors — much like Qualcomm. Samsung’s high-quality memory business for PCs declined “significantly sequentially” due to inventory adjustments by the company and the economic downturn. Samsung remains hopeful that its memory business will pick up in the second half of the year as new CPUs and growing demand for AI generate momentum.

Far from hopeful and stagnant, the MX and Networking business generated KRW 31.82 trillion in combined revenue and KRW 3.94 trillion in operating profit for the first quarter of 2023. Samsung reported its positive performance in the first quarter, which can be attributed to the launch of the Galaxy S23 series – on Specifically, the Galaxy S23 Ultra. Moreover, an initial report from Canalys also showed that Samsung ranked first in Q1 for smartphone shipments, besting Apple.

MX is preparing to unveil its next wave of foldable phones (Galaxy Z Flip 5 and Z Fold 5) as the Korean OEM looks to cement its “class leadership”. Samsung’s budget phones, the Galaxy A54 and Galaxy A34 series, will be in the spotlight as the company looks to regain some market demand as these products gain some new improvements.

Samsung says it will “enhance the competitiveness of tablets and wearables” and take advantage of the experience consumers can gain from those devices. We can probably expect to see what the company has in store later this year when the Galaxy Watch 6 and Galaxy Tab S9 are expected to launch. Samsung’s network business hopes to generate increased revenue by expanding its overseas market and improving its positioning with 5G core chips.

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