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Samsung warns of sales and profit decline

By midian182 · 7 replies
Jan 8, 2019
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  1. In its earnings guidance for Q4 2018, Samsung Electronics said it expected sales to be down roughly 11 percent year-on-year to about 59 trillion won (about $52.5 billion)—analysts were predicting $56.2 billion. Operating profit, meanwhile, dropped 29 percent to about $9.7 billion, whereas it was expected to be $11.8 billion.

    “We expect earnings to remain subdued in the first quarter of 2019 due to difficult conditions for the memory business,” Samsung said, in a statement. While its chip business is usually the firm's shining light, it has suffered in the face of weakened demand from data center customers. The US/China trade war has also caused problems.

    The company is facing tough times in the stagnating smartphone market, too. Flat sales and competition from other firms' top-end devices meant more was spent on marketing. It’s also dealing with the problem of flagship smartphone owners refusing to buy to newer, more expensive models, the ailing Chinese economy, and feature phone owners not upgrading due to the lack of “ultra-low-cost” smartphones .

    The news comes after Tim Cook last week warned that “[Apple] revenue will be lower than our original guidance for the quarter."

    Source: Bloomberg

    Samsung said it expects earnings to be affected by the difficult conditions for memory during the first three months of this year. But it predicts profitability will recover in the second half of 2019 thanks to new phone launches and the sale of new processors.

    Permalink to story.

    Last edited by a moderator: Jan 8, 2019
  2. Uncle Al

    Uncle Al TS Evangelist Posts: 5,377   +3,772

    You know, all of these smart phone companies have been getting away with absorbent prices for years. They are long overdue to be brought back down to earth. If you can't build a smart phone for a couple hundred collars, especially with automated manufacturing the way it is, you really shouldn't survive in the market place and it appears that might just be what's coming!
    Capaill likes this.
  3. Capaill

    Capaill TS Evangelist Posts: 893   +497

    There Samsung go, copying Apple again.
  4. Lew Zealand

    Lew Zealand TS Guru Posts: 659   +552

    Unlike Apple, Samsung generates revenue from many more things than just smartphones, which suggests some softness in the consumer electronics market as a whole.
  5. Capaill

    Capaill TS Evangelist Posts: 893   +497

    I think ALL companies need to learn this simple lesson. Profits can't go up by huge leaps every year indefinitely. Just because profits fall (from their silly huge amount) does not mean the company is in trouble. Find a different way of measuring the success and stability of a company other than continuous increases in profit margins.
    Also, absorbent => exorbitant. Close enough :)
  6. petert

    petert TS Evangelist Posts: 359   +157

    So are you saying capitalism is wrong and unsustainable? Sharpen your pitchforks folks, we have a lynching to do ...
  7. treetops

    treetops TS Evangelist Posts: 2,553   +544

    Idk why people need the newest phone when all they do is basically use the web browser and camera....
  8. captaincranky

    captaincranky TechSpot Addict Posts: 14,914   +3,977

    I tried to explain that yesterday, to know <:laughing: avail...
    Capaill likes this.

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