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Samsung Q4 Profits Drop 29%

Samsung Electronics has post a 29 per cent drop in Q4 2018 operating profit, attributed to lacklustre demand for memory chips and increasing competition in the smartphone market.

After forewarning of disappointing numbers, the Korean giant post quarterly revenues of 59.27 trillion won (~AUD $73,28 billion) – down 10 per cent from the same time last year.

Quarterly operating profit notched 10.8 trillion Korean won (~AUD$13.35 billion), down 29 per cent year-on-year.

The company attributes results to a drop in memory chip demand – usually its biggest profit driver – as well as slowing smartphone sales, and increased competition for mobile displays.

Samsung doesn’t expect demand for memory chips to pick up this quarter, and has consequently warned of weaker earnings for 2019.

By contrast, it expects demand for memory products and OLED panels to pick up from the second half of 2019.

Looking forward, Samsung hopes to lift earnings by expanding Bixby into various devices and connected services.

The Korean giant is also looking to MicroLED TV tech and foldable phones to raise revenue.

With demand for LCD panels forecast to further dip, Samsung is projecting increased demand for its premium TV panels including UHD, 8K and ultra-large displays in 2019.

Earnings in its display division improved QoQ and YoY due to a spike in sales of QLED and supersized TVs, backed by year-end promotions and product mix improvements.

Samsung also claims sales of its QLED TVs have nearly tripled year-on-year.

With demand for smartphones and tablets still expected to drop in Q1Y19, Samsung hopes the forthcoming Galaxy S10 will “prop up sales and business performance in the coming months.”

The device is slated to be revealed at its Unpacked event in February, along with its first foldable phone and 5G devices,

Samsung’s lacklustre Q4 performance didn’t impair overall full-year numbers, posting 243.77 trillion won (~AUD$301.35 billion) in revenue and 58.89 trillion won (~AUD$72.81 billion) in operating profit – its second straight year of record results.

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