Samsung Q1 Profit Down 60% YoY
Samsung Electronics has post a whopping 60% year-on-year drop in Q1 operating profit, following an unprecedented investor warning last week. The Korean giant is banking on electronics sales to offset falling chip prices, and decreased OLED screen demand (e.g. within Apple iPhones).
For the quarter, revenue slipped 14%, with total sales forecast to notch 52 trillion won (US$45.7 billion).
Operating profit is expected to hit 6.2 trillion won (US$5.5 billion).
The figure is down from around US$14.4 billion reported the same time last year.
Whilst the announcement is a preliminary release, a more detail breakdown and final figures will be disclosed in coming weeks.
Earnings are significantly below several analysts’ expectations, and follow sluggish global smartphone sales, and growing US-China trade tensions.
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.
The Korean giant has advised it’s looking into data centre investments to drive memory demand, coupled with increased profits from its new Galaxy Fold foldable phone.
Samsung’s Q2 guidance will also provide commentators a better barometer of Galaxy S10 series sales, with Q1 only encompassing a few weeks.
Overall, analysts expect earnings to rebound in the second half of 2019, citing seasonal demand and lower inventories.
The news comes as the Korean giant accelerates its 5G-smartphone launch, coupled with its recently released 8K TV range.