After Apple preannounced that they'll miss their Q1 2019 target, Samsung announces that their operating profits nose-dived by nearly 40% during the holiday quarter due to weakness in their memory chip business. The operating profits fell far short of the market expectations of 13.6 trillion won, stoking fears among investors already rattled as a result of the global tech slowdown.
In a regulatory filing, the world’s largest manufacturer of chips and smartphones posted 10.8 trillion won in operating profits in the past three months, a 38.5 percent decrease from 15.1 trillion won posted for the previous quarter. It is the lowest operating profit figure since the first quarter of 2017. Sales also dropped 9.9 percent to 59 trillion won from the June-Sept. period. The company plans to release its net profits by the end of January.
Analysts are saying that Samsung may have to reduce its chip production capacity if it is to achieve a recovery in the second half considering the pressure the company and its smaller rival SK hynix face to cut chip prices.
If you think dropping 40% is bad, we're learning this morning that home appliance maker LG Electronics said yesterday that its fourth-quarter operating profit plunged 79.5 percent compared with a year earlier, far below market estimates.