Samsung Electronics flags 60% fall in Q1 operating profit
SEOUL, South Korea – The world's biggest smartphone and memory chip maker Samsung Electronics warned of a 60%-plus fall in first-quarter operating profits Friday, in the face of a weakening chip market.
Operating profits for January to March would be "approximately 6.2 trillion won," the firm said in a statement, down 60.4% on the same period last year, on sales of about 52 trillion won – 14% lower.
The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world's 11th-largest economy, and it is crucial to South Korea's economic health.
It has enjoyed record profits in recent years despite a series of setbacks, including a humiliating recall and the jailing of its de facto chief.
But now the picture is changing, with chip prices falling as global supply increases and demand weakens.
It also has to contend with increasingly tough competition in the smartphone market from Chinese rivals like Huawei – which in 2017 surpassed Apple to take second place – offering quality devices at lower prices.
Samsung was also launching its top-end S10 5G smartphone Friday, after South Korea won the global race to commercially launch the world's first nationwide 5G networks this week.
Samsung withholds net profit and sector-by-sector business performance data until it releases its final earnings report, which is expected later this month. – Rappler.com
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