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Samsung warns of 60 per cent drop in profits

07 April, 2019, 15:00 | Author: Lawrence Cooper
  • Samsung set to launch first 5G smartphone

LG Electronics also saw its first quarter operating profits down by 19 percent on-year to 792 million dollars.

CNN is now echoing a Korean report today that Samsung has stated that "it expects operating profit for the first quarter to plunge by 60% compared to the same period year ago".

The Apple rival earlier had warned the quarter could be disappointing due to falls in prices of memory chips, its core profit-driver, and slowing demand for display panels used in Apple's iPhones.

Samsung hopes to improve its profits later this year with a rise in demand for server DRAM and higher than expected Galaxy S10 foldable-phone sales.

Analysts said LG's longtime loss generating smartphone business, in the red for seven quarters, and intensifying price competition in the global TV market likely weighed on earnings.

The South Korean tech giant released its earnings estimates for the January-March period on Friday. Samsung has developed a visual display that fully immerses consumers in the high-quality HD content, games, augmented reality and video conferencing made possible through 5G.

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Samsung's memory chip business is forecast to rebound in the second half of 2019, with smartphone sales tipped to remain largely flat this year.

According to Evan Blass, a well-known tipster, the Samsung Galaxy S10 5G will arrive to the U.S. on May 16. Further, the South Korean multinational expects smartphone sales to be essentially flat throughout 2019, which affects its ability to sell components like OLED screens as well as its own Galaxy phones.

"Faulty DRAM products are a negative factor for the company's earnings in the short term, but they could positively affect its shares in the long term by lowering the inventory level".

However, there have been bigger and better than expected demand for Samsung's flagship device, the Galaxy S10. Samsung also plans to reduce spending and focus on profitability for its memory facilities. "Samsung has end-to-end 5G solutions, ranging from equipment, devices and chipsets".

As of 9:38 a.m. Friday, shares of Samsung Electronics are trading 0.2 percent lower at 46,850 won apiece.

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