Samsung Electronics Co said on Tuesday that it is expecting weaker-than-predicted business results for the first quarter due to a sharp decline in memory chip and panel prices. The major smartphone maker is scheduled to release its preliminary first-quarter earnings early in April. "Due to worse-than-expected business conditions, we expect January-March earnings to remain below the market expectations," Samsung said in a regulatory filing, Yonhap news agency reported. The world`s largest memory chipmaker said semi-conductors are expected to fall further by larger-than-expected margins due to weak demand, and prices of LCD panels are also struggling amid a supply glut.

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Samsung Electronics traded at 45,250 Won on the Seoul bourse as of 11.12 a.m., down 0.55 per cent from the previous session`s close. The earnings warning came amid weak chip demand from the smartphone market and the protracted trade war between the US and China. Although sharper-than-expected decline in chips may have dented the tech firm`s bottom line, analysts expect demand and chip prices to rebound in the second half of the year.

South Korean brokerage houses have sharply downgraded the first-quarter earnings forecasts for Samsung Electronics, citing tumbling memory chip prices. The market consensus of Samsung`s operating profit for the first three months of the year stands at 8.33 trillion Won ($7.36 billion), down about 47 per cent from a year earlier, according to corporate tracker FnGuide.

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Analysts further painted a gloomy picture of Samsung`s earnings for the remaining quarters, saying their operating profits are unlikely to rise on-year. Samsung said earlier that it will propel technology innovations to tackle the unfavourable business environment and foster new growth drivers, such as Artificial Intelligence (AI) and 5G.