Samsung Electronics today announced that it is predicting lower-than-expected earnings for the first quarter of the year. The reasons cited by the company are the slowing down of the display and memory markets. Making such a statement before the release of preliminary earnings forecasts in the first week of April is unprecedented, “but it was a decision for investors”, The Korea Herald reports citing an unnamed Samsung official.
Due to the worse-than-expected weakening of the display and memory markets, the company’s first-quarter performance is predicted to be poorer than market forecasts — Samsung statement
Samsung’s operating profit for the first quarter of the year is expected to be down 49 percent compared to the same period of last year, estimated by the financial market at 7.9 trillion won ($6.96 billion). The display business took a hit mostly due to prices of LCD panels going down, as well as declining demand for flexible OLED panels.
The memory business is heavily affected due to chip prices falling. “Prices of some premium DRAM chips for servers plunged more than 20 percent in the first quarter“, says the report.
The company will focus its efforts on improving cost competitiveness by using its resources efficiently in the short run, while planning for strategic investments in research and development to strengthen core capabilities for sustainable growth in the long run — Samsung statement