14 June 2019
Samsung posted its highest ever profit in the last quarter, however, the company has posted weak results in the current quarter. The South Korean giant has just announced its earnings guidance for Q4 2018 and revealed an estimated 29% drop in profit. The company stated that the weak demand in the memory division has caused the profits to decrease steeply.
Samsung estimated sales worth 59 trillion won (about $52.5 billion) during Q3 2018, which is down 9.87% from 65.46 trillion won ($58 billion) in the last quarter. Samsung estimated profit at about 10.8 trillion won ($9.67 billion) in the Oct-Dec quarter, which is down 29% from the same period a year earlier. This is Samsung’s lowest profit since Q1, 2017. The electronics giant stated that the profits will remain subdued in Q1, 2019 due to weakness in the memory market.
The company stated that the market will improve in the second half of the year, with the launch of new devices. Samsung stated that its 5G and foldable devices will improve its mobile division’s performance in the second half of 2019. The company’s OLED panels for smartphones will continue to increase market penetration. However, analysts believe Samsung’s profit will decline through 2019 due to the slowdown in the Chinese economy.
Samsung has issued a statement for earnings guidance on Tuesday in a bid to “ease confusion” among investors. The forecast is based on estimates made under K-IFRS, but it doesn’t include the performances of respective business divisions. The South Korean giant will reveal the finalized earnings report for Q4 2018 later this month.