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Analysts predict a weaker Q4 for Samsung Electronics

Business
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Last updated: December 24th, 2018 at 14:41 UTC+01:00

2018 has been a mixed bag for Samsung Electronics so far. Though the company continued to post impressive earnings quarter after quarter, there were visible signs of an impending slowdown. The company’s mobile business failed to impress despite launching critically-acclaimed products. Even the company’s most profitable semiconductor business faced an uncertain future. It appears the fourth quarter of this year will finally see the impact of some of these visible threats.

According to a report in The Investor, Korean analysts are predicting a weaker Q4 for Samsung Electronics. They are forecasting Samsung’s operating profit to drop 7.6 percent from the 15.1 trillion won in Q4 2017 to 13.9 trillion won (US$12.30 billion) in the last quarter of this year. If the projections turn out to be on point, then this will be the first time the company’s quarterly operating profit will drop below 14 trillion-won since Q1 2017.

Still a record year for Samsung

The forecasted operating profit for Q4 represents a 20.5 percent drop from the record high 17.5 trillion won posted in the previous quarter. Sales are also expected to drop 3.2 percent to 63.8 trillion won during the October-December period.

The weaker projections are attributed to the drop in DRAM and NAND chip prices globally. Worsening trade relations between the US and China, the flux in the international financial markets, and China’s growing investment in the domestic semiconductor industry are mentioned as the other reasons for the weak forecast.

For the entire 2018, however, the company is expected to post a record operating profit of 62.6 trillion won, up from the 53.6 trillion won posted last year. The company’s Q4 earnings guidance is expected in early January.

Source Business Samsung Electronics
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