Plus   Neg

Samsung Q4 Profit Drops 37%

samsung 062112 29jan20

Samsung Electronics Co Ltd (SMSN.L,SSNNF.OB,SSNLF.OB) reported a profit for the fourth-quarter that dropped about 37.24 percent from last year, reflecting continued fall in memory chip prices and weakness in display panels. Quarterly operating profit also declined 33.70 percent from last year, while sales increased about 1.05 percent.

Looking ahead to 2020, the company expects improvements in overall business performance but also sees continued uncertainties in the global business environment.

The company expects weak sales from seasonality in memory chips, OLED and consumer electronics in the first quarter of 2020.

First quarter profit from the Mobile Business is seen steady quarter-on-quarter, as new flagship and foldable models will improve sales but incur additional marketing costs.

Memory market conditions will likely improve gradually reflecting increasing demand from data center companies and 5G smartphone adoption. However, the actual pace of 5G expansion and its effects on DRAM content remain to be seen.

Samsung reported that net income attributable to the shareholders of the parent company for the fourth-quarter of 2019 dropped 37.24 percent to 5.23 trillion Korean won from 8.33 trillion won last year.

Improving demand for memory used in servers and mobile products, as well as solid sales of flagship smartphones, helped ease the decline in overall earnings, the company said.

The company's operating profit declined 33.70 percent to 7.16 trillion won from 10.80 trillion won last year.

Sales for the quarter rose 1.05 percent to 59.88 trillion won from 59.27 trillion won in the prior year.

The Semiconductor businesses posted 16.79 trillion won in consolidated revenue and 3.45 trillion won in operating profit in the fourth quarter.

The Display Panel Business posted 8.05 trillion won in consolidated revenue and 0.22 trillion won in operating profit for the fourth quarter.

Looking ahead to the first quarter of 2020, Samsung expects a further drop in mobile displays earnings due to weak demand from some customer.

The IT & Mobile Communications Division posted 24.95 trillion won in consolidated revenue and 2.52 trillion won in operating profit for the fourth quarter of 2019.

Looking ahead to the first quarter, weak demand is seen for smartphones and tablets due to low seasonal demand. But, Samsung expects smartphone revenue to rise on improved product mix with the launch of new flagship models and foldable smartphones.

For the whole of 2020, while demand for 5G smartphones is expected to increase, market competition is also forecast to intensify as manufacturers increasingly adopt high performance components including APs, memory and cameras.

The Consumer Electronics Division, comprised of the Visual Display and Digital Appliances businesses, recorded 12.71 trillion won in consolidated revenue and KRW 0.81 trillion in operating profit for the fourth quarter of 2019.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT