Samsung bets on improved second half year earrings
South Korea’s Samsung Electronics has forecast an improved second half year earnings, after posting a weaker than expected first quarter.
Samsung Electronics has said it predicts its second half year results will pick up in memory chip and smartphone sales, after it posted its weakest Q1 profit in more than two years.
The electronics company also warned of more short-term pain in the second quarter, forecasting memory chip prices would likely decline further.
‘For the second half of 2019, the company expects memory chip demand for high-density products to increase, but uncertainties in the external environment will persist,’ Samsung said in a statement on Tuesday.
Samsung posted its operating profit of $5.4 billion in the quarter ending March, marking its smallest since 2016.
Revenue fell 13.5%, in line with its earlier estimates.
Samsung's semiconductor business booked a 64% fall in operating profit, while the display business logged 560 billion won in losses.
It comes amid a downturn in the global smartphone market and a fall in demand from data centres.
Samsung said its server DRAM chip customers would start rebuilding inventories from the end of the second quarter, while new smartphone models would support sales of mobile DRAM.
Mobile profits fall
The South Korean phone maker said its mobile business posted a 40 % drop in operating profit to 2.3 trillion won in the first quarter.
Samsung said it hopes to boost its mobile business with its latest handset, featuring a big, bending screen.
However, Samsung had delayed global sales of the foldable phone after reviewers discovered problems with the display.
The company said it expects demand for flexible display panels would likely pick up and sales for its smartphones were also expected to rise in the second half of 2019. The company predicts growth to be led by new models in all segments including the low-end Galaxy A series.
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