Samsung Electronics’ share price sink 1.41% after firm flags 56% fall in Q2 operating profit
The group forecast its operating profit from April to June to reach around 6.5 trillion won, which would mark it the lowest profit for the firm since the third quarter of 2016.
Shares of Korean technology firm Samsung Electronics sank by 1.41% on Friday after the company said it expects operating profit to tumble 56% for the second quarter of this year due to a softening chip market.
The group forecast its operating profit from April to June to reach around 6.5 trillion won, which will be 56% lower compared to a year ago. Samsung Electronics is the flagship subsidiary of conglomerate Samsung Group.
Revenue for the quarter is projected to slip 4% to 56 trillion won.
The dip in operating profit would mark the lowest profit for the firm since the third quarter of 2016, when the firm was hit by problems of its Galaxy Note 7 catching fire which then caused the firm to recall millions of the new phones across its worldwide markets.
Samsung share price lower by 1.41%
Shares of Samsung Electronics fell by 1.41% or 650 Korean won, at 45,350 Korean won, at 11.05am Seoul time.
Year-to-date, the electronics firm’s shares have risen by 17%, from the share price of 38,750 Korean won on January 2, 2019.
Falling chip prices
Chip prices have been falling as global supply increases while demand softens.
In April, the firm pushed back the release of its new Galaxy Fold phones after reviewers claimed that they received phones with screen problems. The release of the folding handset would have spurred demand and driven sales for the quarter.
A fall in memory chip shipments to China’s Huawei also contributed to the supply glut. Companies worldwide have been forced to restrict their business dealings with Huawei to comply with United States trade sanctions.
Although the reduced intake from Huawei likely caused chip earnings to take a hit, Samsung Electronics’ smartphone sales are likely to improve from the Chinese firm’s fall in handset sales internationally.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.