Samsung warns first-quarter earnings will miss forecasts
Samsung Electronics surprised markets after warning that first-quarter earnings would come in below expectations.
The South Korean giant, in a rare update ahead of its scheduled earnings guidance next month, said there had been a fall in the price of chips. “The company expects the scope of price declines in main memory chip products to be larger than expected,” it noted. Samsung is the world’s largest chipmaker.
It also said it had seen slower demand and weaker prices for its display panels, caused in part by increased capacity at Chinese rivals.
Chipmakers and other electronics companies are feeling the pinch as global demand wanes, smartphone sales fall and stock inventories rise. Apple shocked markets earlier this year when it issued its first profits warning since 2002, which it blamed on weaker iPhone sales and a slowdown in the Chinese economy.
Samsung, which is both a supplier and rival to Apple, reported a 30% slide in fourth quarter profits in January and cautioned that 2019 would see weaker earnings after a period of strong sales.
The company was forecast to post operating profits of 7.2trn won in the first quarter, according to Reuters, a hefty fall on the 15.6trn won recorded in the same period a year ago.