Samsung estimates a massive 53% drop in profit for 2019
The first quarter of 2019 set the tone for a tough year when Samsung posted its lowest quarterly profit in three years. Samsung’s lucrative semiconductor business saw its revenues shrink considerably due to slow demand and falling margins. This remained the story for the entire year even as some of Samsung’s other divisions showed promise.
Samsung today released its earnings guidance for the fourth quarter of 2019. When combined with the numbers for the first three quarters, the estimated operating profit for the quarter ending December 2019 represents a 53 percent profit decline in 2019 compared to 2018.
2019 saw Samsung’s operating profit being cut in half
Samsung expects revenue for the fourth quarter of 2019 to come in at 59 trillion won or $50.5 billion. It estimates 7.1 trillion won or $6.02 billion in operating profit for the quarter, down 35 percent from the $9.2 billion operating profit it posted in Q4 2018. The company’s total operating profit for 2019 based on the latest quarterly estimates comes out to 27.1 trillion won or $23.2 billion, a steep 53 percent decline compared to the $50.4 billion it earned in full-year profit back in 2018.
We’ll get a better idea of how Samsung’s many divisions performed in the final quarter of last year when it releases the full earnings report by the end of this month. Analysts suggest that revenues from Samsung’s semiconductor division may have partially recovered in Q4 2019 while its display division is expected to have posted lower profits due to weak demand.
The company’s profits have consistently taken a hit since Q3 2018 after earnings from the semiconductor division peaked. Demand and prices for memory chips both declined in subsequent quarters, and as this division was Samsung’s cash cow, the impact was immediately visible on its balance sheet. That’s largely why Samsung made 53 percent less in profits last year compared to 2018. Be that as it may, an operating profit of $23.2 billion is still nothing to scoff at.Join the Discussion