AFP, Seoul :
Samsung Electronics on Tuesday flagged its first quarterly profit drop in two years, painting a grim outlook amid mounting competition from Chinese smartphone makers and declining chip prices.
The South Korean tech giant – the world’s top maker of smartphones and memory chips – has enjoyed record profits in recent years despite a series of setbacks, including a humiliating recall and the jailing of its de facto chief.
But operating profit during the October to December period was expected to be around 10.8 trillion won ($9.8 billion), down 28.7 percent from a year earlier, Samsung said in an earnings estimate.
The figure was below market consensus of about 13.5 trillion won, according to market researcher FnGuide.
Sales dropped more than 10 percent to 59 trillion won in the period, Samsung said.
It cited “lacklustre demand in the memory business and intensifying competition in the smartphone business” for the dismal outlook. “Memory earnings fell significantly… due to weaker-than-expected demand amid inventory adjustments at data-centre customers,” it said.
That led to a drop in shipments and a “greater-than-expected” decrease in chip prices, it added.
“We expect earnings to remain subdued in the first quarter of 2019 due to difficult conditions for the memory business but strengthen in the second half,” it forecast.
Samsung withholds net profit and sector-by-sector business performance data until it releases its final earnings report, which is expected later this month.
For 2018, the South Korean tech giant said it expects operating profit to reach 58.9 trillion won, up nearly 10 percent from the previous year, and sales to inch up 1.6 percent to 243.5 trillion won.
Samsung Electronics on Tuesday flagged its first quarterly profit drop in two years, painting a grim outlook amid mounting competition from Chinese smartphone makers and declining chip prices.
The South Korean tech giant – the world’s top maker of smartphones and memory chips – has enjoyed record profits in recent years despite a series of setbacks, including a humiliating recall and the jailing of its de facto chief.
But operating profit during the October to December period was expected to be around 10.8 trillion won ($9.8 billion), down 28.7 percent from a year earlier, Samsung said in an earnings estimate.
The figure was below market consensus of about 13.5 trillion won, according to market researcher FnGuide.
Sales dropped more than 10 percent to 59 trillion won in the period, Samsung said.
It cited “lacklustre demand in the memory business and intensifying competition in the smartphone business” for the dismal outlook. “Memory earnings fell significantly… due to weaker-than-expected demand amid inventory adjustments at data-centre customers,” it said.
That led to a drop in shipments and a “greater-than-expected” decrease in chip prices, it added.
“We expect earnings to remain subdued in the first quarter of 2019 due to difficult conditions for the memory business but strengthen in the second half,” it forecast.
Samsung withholds net profit and sector-by-sector business performance data until it releases its final earnings report, which is expected later this month.
For 2018, the South Korean tech giant said it expects operating profit to reach 58.9 trillion won, up nearly 10 percent from the previous year, and sales to inch up 1.6 percent to 243.5 trillion won.
