Samsung Anticipates Lower Profit Fall On Rising Chip Prices


Samsung Electronics forecast another double-digit drop in operating profit for the fourth quarter of 2019, with analysts noting the decline would be lower than previously expected due to a recovery of global chip prices.

In earnings guidance issued 8 January, the world’s largest memory chip and smartphone maker predicted operating profit of KRW7.1 trillion (US$6.1 billion), down 34 per cent year-on-year, on revenue of KRW59 trillion compared with KRW59.26 trillion in the final quarter of 2018.

Chief investment officer for equities at Macquarie Investment Management Korea, Jeon Kyung-dae told Bloomberg the fundamentals of Samsung’s chip business are great: “Memory chip prices already turned around in the fourth quarter and the recovery has started earlier than the market’s expectation.”

The South Korean vendor posted declines in earnings since late 2018, mainly due to falling memory prices.

Samsung submitted the guidance in a regulatory filing and didn’t break out revenue or operating profit by business division. The company is expected to release detailed earnings later this month.

Its annual operating profit for 2019 is forecast to fall 53 per cent to KRW27.7 trillion, the lowest since 2015, Reuters reported.-Mobile World Live

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