Samsung Electronics Says Q4 Net Profit Slumps 38%

Samsung Electronics Says Q4 Net Profit Slumps 38%

Samsung has reported a 34 per cent fall in operating profit to around $6 billion in the fourth quarter, its become the worst performance since 2015. Its  net profit fell 38% to about $4.7 billion, while its revenue for the quarter was up 1% to about $50.7 billion due to low demand in key products and falling chip prices in the market.

Fourth quarter profit dropped from a year earlier due to the continued fall in memory chip prices and weakness in display panels. Samsung expects this drop because of weak sale from seasonality in the memory chips, OLED ( organic light emitting diodes) and consumer electronics. In the fourth  quarter operating profit more than halved to 3.45 trillion won in Samsung‘s main stray chip division and its mobile division profit surged by two- thirds to 2.52 trillion won, makes a strong sales of flagship models.

Samsung has been strained by trade tensions between the US and China, and caught in a diplomatic row between Seoul and Tokyo over war time history, with japan imposing tough restrictions on exports crucial to South Korean tech giants in July. 

Samsung’s chip peers like Intel and TSMC earlier offered a positive reaction and fueling hopes of a rebound in chips prices after a slide that were started in late 2018. They were expected January- March earnings to fall from the preceding quarter, reflecting low seasonal demand for chip and displays. “ Samsung offered a conservative out look for the memory market, and there is a disconnect between market views and the company views when it comes to the strength of the recovery”.said by Park Sung-soon, an analyst at Cape Investment and Securities.

In 2020, Samsung is pinning its hopes on increasing availability of 5G telecom services driving sales of its handsets. Global demand for the super fast 5G handsets in 2019 was higher than expected, with nearly 19 million units shipped world wide according to the latest data from market researcher strategy analytics.