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Operating Profit of Samsung Plunges 29% in Q4 2018

Apple last week downgraded its sales forecast for the last three months of 2018, suggesting a drop in orders for Samsung, one of the major chip providers for iPhones

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Samsung files new patent application for 3D displays.

Samsung Electronics Co said on Tuesday its operating profit plunged 28.7 per cent in the fourth quarter compared with a year ago due to weak memory demand, falling far short of market expectations.

Operating profit came to 10.8 trillion won ($9.66 billion) in the October-December period, the South Korean tech behemoth said in a regulatory filing. This is down 38.5 per cent from 15.1 trillion won posted a quarter earlier, Yonhap news agency reported.

The operating profit was the lowest since the first quarter of 2017.

Sales fell 10.6 per cent on-year to 59 trillion won over the cited period, the company said.

The operating profit was far below market expectations of 13.6 trillion won, based on the survey conducted by Yonhap Infomax, the financial arm of Yonhap News Agency, on 23 South Korean brokerage houses.

Samsung did not announce the net profit for the fourth quarter, nor the performances of respective business divisions. The finalised earnings report will be announced later this month.

Samsung
The operating profit was the lowest since the first quarter of 2017.

For 2018, the company expected the operating profit and sales to reach 58.9 trillion won and 243.5 trillion won respectively on the back of strong demand for memory chips in the global market. The sales estimate is the record-high annual figure.

Samsung said demand for memory chips in the last three months of 2018 hovered far below the market expectation as major data centers adjusted their inventories, which drove down prices of DRAM products.

Sales of smartphones also slowed in the maturing market with promotion costs in the peak season cutting into its profitability, it noted.

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“Operating profits sharply decreased due to lacklustre demand in the memory division and intensifying competition in the smartphone sector,” Samsung Electronics said in a rare release for a preliminary earnings report.

The prices of DRAM, a type of memory used for the temporary storage in computer systems, sank 10 percent in the fourth quarter from the previous quarter due to weak demand for PCs, servers and smartphones, according to corporate tracker DRAMeXchange.

Apple last week downgraded its sales forecast for the last three months of 2018, suggesting a drop in orders for Samsung, one of the major chip providers for iPhones. (IANS)

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Samsung to Foster Growth by Investing in AI and 5G

To get ahead in the fast-changing tech industry, Samsung said it will expand investment in burgeoning tech segments to propel growth

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To get ahead in the fast-changing tech industry, Samsung said it will expand investment in burgeoning tech segments to propel growth. Wikimedia

Samsung Electronics Co on Wednesday said it will propel technology innovations to tackle the unfavourable business environment and foster new growth drivers such as artificial intelligence (AI) and 5G.

Samsung vowed to step up its innovations to overcome business challenges amid falling prices of memory chips and flattening global demand for new smartphones.

“The company plans to push for profound innovations across the divisions as the unfavourable business environment is expected to continue this year,” Kim Ki-nam, vice chairman of Samsung Electronics, said at a meeting at the company headquarters attended by about 1,000 investors.

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“We will focus on new, promising businesses, such as AI and 5G, to bring meaningful changes and will actively respond to new business opportunities,” Kim said. Pixabay

To get ahead in the fast-changing tech industry, Samsung said it will expand investment in burgeoning tech segments to propel growth.

“We will focus on new, promising businesses, such as AI and 5G, to bring meaningful changes and will actively respond to new business opportunities,” Kim said.

Announcing business plans during the shareholders meeting, the first since a 50:1 stock split in May which was aimed at making it easier for retail investors to purchase stakes in the firm, Kim said: “We will continue to release innovative products in our home appliance and IT and mobile communication divisions to expand our market-leading position.”

The world’s largest handset and memory chip maker said it posted $215.8 billion in sales and $52 billion in operating profits last year on a consolidated basis, posting record high profits driven by the boom in memory chips, Yonhap news agency reported.

 

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Its bid to propel its 5G business comes as Huawei, the world’s largest telecom equipment maker, faces growing pressure from the US over security protection issues. Pixabay

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Its bid to propel its 5G business comes as Huawei, the world’s largest telecom equipment maker, faces growing pressure from the US over security protection issues.

The Korean tech firm currently has a mere 3 per cent share in the 5G equipment sector, lagging far behind Huawei’s 28 per cent and Ericsson’s 27 per cent, according to market researcher IHS Markit.

The company has set a goal of capturing a 20 per cent share in the 5G equipment market by 2022. (IANS)