Samsung expects 60 percent dip in operating profit for Q1, worst performance in 4 years
Apple "frenemy" Samsung is expecting a bleak first quarter of 2019, with the company estimating operating income to come in down more than 60 percent on the year due to drooping memory chip prices and sluggish smartphone sales.
In a brief earnings guidance update published Friday, the Korean tech giant said it anticipates operating profit to fall to approximately 6.2 trillion Korean won ($5.5 billion) on consolidated sales of about 52 trillion won.
The figure represents a precipitous 60 percent downturn compared to the year-ago quarter, which saw Samsung rake in 15.6 trillion won in profit. As noted by Bloomberg, the projected results qualify as Samsung's largest decline since the third quarter of 2014, when the company experienced a similar income hit.
In March, Samsung issued a warning to investors, saying results for the quarter would not meet expectations due to weakness in its memory chip and display businesses.
Samsung's fortunes are in part tied to those of Apple, as the company is a major supplier of iPhone display panels. In recent quarters, sales of Apple's smartphone lineup have slumped, pulling down with it orders from partner parts manufacturers. Samsung's display arm also faces increased competition from Chinese display makers.
The Korean company endeavored to pad its bottom line by flexing its smartphone sector muscles, and in February released a slate of new Galaxy S10 products. Taking a page out of Apple's playbook, Samsung positioned the flagship smartphones as premium tier devices with prices ranging from $750 to $1,000. An even more expensive folding model, aptly dubbed Galaxy Fold, is due to go on sale later this month for an eye-watering $1,980.
Both Apple and Samsung are coping with a slowdown in the overall smartphone market, an issue compounded by increased competition in the important China region.
Samsung is expected to provide detailed accounting of its business later this month.
In a brief earnings guidance update published Friday, the Korean tech giant said it anticipates operating profit to fall to approximately 6.2 trillion Korean won ($5.5 billion) on consolidated sales of about 52 trillion won.
The figure represents a precipitous 60 percent downturn compared to the year-ago quarter, which saw Samsung rake in 15.6 trillion won in profit. As noted by Bloomberg, the projected results qualify as Samsung's largest decline since the third quarter of 2014, when the company experienced a similar income hit.
In March, Samsung issued a warning to investors, saying results for the quarter would not meet expectations due to weakness in its memory chip and display businesses.
Samsung's fortunes are in part tied to those of Apple, as the company is a major supplier of iPhone display panels. In recent quarters, sales of Apple's smartphone lineup have slumped, pulling down with it orders from partner parts manufacturers. Samsung's display arm also faces increased competition from Chinese display makers.
The Korean company endeavored to pad its bottom line by flexing its smartphone sector muscles, and in February released a slate of new Galaxy S10 products. Taking a page out of Apple's playbook, Samsung positioned the flagship smartphones as premium tier devices with prices ranging from $750 to $1,000. An even more expensive folding model, aptly dubbed Galaxy Fold, is due to go on sale later this month for an eye-watering $1,980.
Both Apple and Samsung are coping with a slowdown in the overall smartphone market, an issue compounded by increased competition in the important China region.
Samsung is expected to provide detailed accounting of its business later this month.
Comments
On the hardware side of Apple's business, it would not be unreasonable to assume a drop in shipments has had at least a partial impact on Samsung's numbers too.
I don't think AI attracts a lot of Sammy fans (I'm certainly not one) tho I'm sure there's some users of their handsets here who use Apple gear too.
Some folks swing both ways.
Apple is held in much higher regard and presumed to rarely have bad news to offer, at least in the past decade or so. When the richest company on the planet with perhaps the highest profile of anyone stumbles people notice. Samsung on the other hand carries no such weight in the public eye. Big company with a lot of stumbling.
You should be able to understand that if you stop taking everything so personally. On the one hand it's kinda flattering I guess that you follow me so closely and interested in what I have to say, but the insults you keep lobbing my way rather than counter-arguments (most of the time), and especially those times when you call out to me on some thread where I've not taken part, are a bit stalker-ish.
Toning down the personal stuff would be appreciated. Perhaps you haven't noticed how often you resort to it, but now you've been made aware. I'll have discussions with almost anyone, sometimes even vehement ones, but if your only interest is insulting me I'd rather not play.
An easy example to illustrate exactly how much sense it doesn't make is this: Apple just had a YoY quarterly loss where they missed by several billions of dollars. No one in their right mind would conclude Apple missed earnings therefore they were selling products at a loss. That would be insane. Apple sold fewer products, that's why they missed. It's also why Samsung missed. It's literally right in the article. They sold fewer memory chips, OLED, panels, and phones. Considering most of Samsung's handset volume is generated by it's economy and mid tier phones, it's a pretty good assumption they aren't selling them at a loss. To suggest otherwise would be equally insane.