uploads/// e

Samsung Expects Its Operating Profit to Plunge for a Change


Jan. 9 2019, Updated 12:03 p.m. ET

Samsung expects its operating profit to fall 29% YoY

It’s been coming. Global shipment growth has been sluggish for years now and is currently on the decline. The fourth quarter of 2018 was all about the weak demand for Apple’s latest flagships.

Now, South Korean giant Samsung (SSNLF) is expecting its fourth-quarter operating profit to fall 29% YoY (year-over-year) to 10.8 trillion South Korean won ($9.8 billion).

This weakness comes after Samsung posted a string of record profits in the last several quarters. The company has blamed weak demand for memory chips—which have propelled its profits all these years—along with fierce competition in the smartphone space.

Article continues below advertisement

The smartphone industry is poised to have another tough year

As we mentioned earlier, increasing smartphone prices and falling upgrade rates have choked growth in the industry. Additionally, in countries such as China and India, Samsung faces stiff competition from Chinese companies such as Xiaomi, which produce value-for-money handsets, eating away Samsung’s market share.

Another factor that has hit the electronics giant’s bottom line is the falling prices of dynamic random-access memory chips. The surging prices of these chips caused the company’s operating profits to swell in recent years.

Smartphone markets are likely to face more headwinds in 2019 given the looming likelihood of a global slowdown. Lower disposable income could potentially further reduce the smartphone upgrade rate.


More From Market Realist

  • Businesswoman looking out a window
    Company & Industry Overviews
    Shifting Focus: Three Women Investing Funds in 2021
  • Aol logo on office building,
    Company & Industry Overviews
    What We Know About Apollo Global Management, New Owners of AOL and Yahoo
  • Chick-fil-A sign
    Company & Industry Overviews
    Why It Only Costs $10K to Own a Chick-fil-A Location
  • Beyond Meat Burger 3.0
    Company & Industry Overviews
    How Is Beyond Burger 3.0 Different and Will It Bring BYND Stock Up?
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.