Samsung warns of Q4 profit drop amid weak chip demand

Jung Yeon-je  AFP  Getty Images

Shares traded at 38,150 won as of Tuesday's closing, a 1.68 percent drop from the previous trading day.

Turns out Apple is not the only company expecting to disappoint investors with its next set of quarterly results - Samsung and LG are in the same boat.

It also estimated a 11 per cent on-year revenue decline at 59 trillion won.

Samsung did not announce the net profit for the fourth quarter, nor the performances of respective business divisions. This is the first time they have commented on an earnings report since 2014.

That's down more than 10 percent in won terms from the same period in 2017. The tech-heavy Nasdaq Composite index has fallen 16 percent since setting a record high on August 30.

"Memory earnings fell significantly. due to weaker-than-expected demand amid inventory adjustments at data-centre customers, ' which led to a 'greater-than-expected" drop in chip prices, it said.

Sales of smartphones also slowed in the maturing market with promotion costs in the peak season cutting into its profitability, it noted.

CES 2019: AMD unveils 7nm gaming GPU, Radeon VII
Meanwhile, last year's Ryzen 7 2700X scores 1754 points in the same test, so we are looking at a decent performance bump. In addition, AMD Radeon FreeSync2 HDR technology offers more than 2X better brightness and color volume compared to sRGB.

2nd suspect charged in Houston girl's death
Based on a tip provided by King, the police apprehended Eric Black and Larry Woodruffe and charged them with the murder . Investigators said Jazmine was shot in the head December 30 when someone opened fire into her family's vehicle .

Man arrested after stealing roommate's winning lottery ticket worth $10 million
Adul Saosongyang , 35, is alleged to have switched the card, which he thought was a $10,000 victor , while his roommate slept. The man, whose identity has not been released, returned home, told his roommates about his lucky strike and went to bed.

The firm has warned of lower profit until early 2019, citing a likely end to a two-year boom in memory chips that has fuelled record figures despite slowing demand for its handsets.

One reason for these results is lower demand for memory chips, due to worsening relations between USA and China as well as poor sales of Apple's iPhone, which uses Samsung chips.

Memory chips account for the biggest portion of Samsung's profit. "In the mid and long term, the supply and demand will be in balance as technical barriers and capital intensity will put pressure on the supply side". It also highlights the challenges that the technology sector is now facing. Samsung saw a 13.4 percent year-over-year decline in global smartphone shipments in the third quarter of 2018, according to International Data Corporation.

Analysts projected downbeat prospects for the world's largest chip and phone maker in 2019.

"It's a surprise", said analyst Lee Jae-yun at Yuanta Securities.

"The reality is that the semiconductor industry is still under a thick cloud with no clear outlook".

Samsung said a "stagnant and fiercely competitive" mobile market had weighed on earnings as marketing spend rose but smartphone sales volumes remained flat.

Related:

Comments

Latest news

Harrington tasked with masterminding Europe's Ryder Cup defence
The 47-year-old has been odds-on favourite to captain at Whistling Straits in Wisconsin next year. An announcement is expected at a press conference at the European Tour's Wentworth headquarters.

Astronomers detect radio signals from deep space
CHIME identified a fast radio burst with the lowest dispersion yet discovered, suggesting its source is the closest to Earth. The telescope has been in use for only a year, detecting 13 of the radio bursts nearly immediately, including the repeater.

Victorian man arrested for allegedly sending suspicious packages to embassies
More than a dozen foreign offices received suspicious packages on Wednesday, including the USA and British missions in Melbourne. The consulate was temporarily evacuated, but NSW Police confirmed on Tuesday the substance was not unsafe .

Tata Motors' JLR to cut jobs in thousands amid China sales crunch
The firm, owned by Indian conglomerate Tata, cut 1,000 temporary contract workers at its plant in Solihull in 2017. Mr Armstrong said Ford was making "tough" decisions by undertaking a "complete review" of its European operations.

Aaron Ramsey transfer latest: Juventus preferred, Barcelona dream, Liverpool deal option
Ramsey will leave Arsenal at the end of the season on a free transfer after Arsenal withdrew a contract offer previous year . He will be fondly remembered by Arsenal fans, most of whom wish he wasn't going.

[LISTEN] Parent horrified at alleged racism at NW school
Du Plessis added that the photograph was a "reflection of a single moment in a classroom". A teacher at the school has been suspended , pending the outcome of that probe.

Indiana Basketball: Hoosiers fall to MI 74-63
They joined No. 8 Michigan State as the two teams without a Big Ten loss four games into the 20-game conference schedule. Michigan: The Wolverines usually play just two players off the bench, but Johns may have earned more playing time.

The US Open row will not tarnish Serena’s legacy: Evert
Chris Evert has no doubt that history will only reflect well on Serena Williams , who is preparing for the Australian Open . It was an incident that overshadowed Naomi Osaka's maiden grand slam triumph and split opinion among fans and pundits alike.

IBM unveils the World's first commercial Quantum Computer
IBM has, therefore, consolidated all the components of the Q System One into a glass-enclosed, air-tight environment. The Consumer Electronics Show floor is abuzz with the talk about IBM's standalone quantum computer.

Kelly Planning To Flee The Country Amid Criminal Investigation?
The efforts are looking to find other victims who would join a "united front" before a case is presented to a state attorney. Foxx, a sexual assault survivor herself, said that she was left "sickened" after watching the series.

Criminals Demand $10 Million in Monero (XMR) in Norwegian Kidnapping Case
The police are now asking the public for any information regarding the search for Anne-Elisabeth Falkevik Hagen. Norwegian police have also engaged worldwide counterparts in Interpol and Europol as part of the probe.

Swinney, Clemson already looking to add another title
It was also just the seventh interception and second interception returned for a touchdown in Tagovailoa's career. During the 1985-1986 season, Holieway took over as starting quarterback after Troy Aikman's leg was broken.

United Kingdom parliament debates Brexit deal ahead of crucial vote
But the bloc refuses to reopen the agreement, and opposition to the negotiated deal remains strong among British lawmakers. A majority of members of Parliament oppose a no-deal Brexit, but it remains the default option if May's deal is rejected.

Ex-Packers coach Mike McCarthy to sit out 2019 season
Additionally, Breer reports that quarterback Sam Darnold played a role in the Jets decision to hire Gase. McCarthy told NFL Network he has chose to sit out the upcoming season after the Jets hired Adam Gase.

Kate Middleton BOMBSHELL: How Duchess 'flashed BOTTOM at boys out of window'
The palace wished Middleton a happy birthday on the palace and the royal family's official Twitter accounts. Charlotte goes to Willcocks Nursery School, while George goes to Thomas's London Day School in Battersea.

Other news