Samsung Electronics Co. expected market estimate-beating fourth-quarter earnings Wednesday on a slight recovery in chip prices but suffered its worst performance in four years in 2019 due to a prolonged slump in the chipmaking sector.
The world’s No. 1 memory chipmaker estimated its fourth-quarter operating income at 7.1 trillion won (US$6.1 billion), down 34.26 percent from a year earlier, but the reading was well above the median market estimate of 6.5 trillion won, as chip prices bottomed out and its smartphones drew better-than-expected market response.
The Korean tech giant expected its fourth-quarter sales at 59 trillion won in the three-month period, down 0.5 percent on-year. The fourth-quarter sales estimate stood at 60.5 trillion won on average.
For all of 2019, Samsung predicted its operating profit at 27.71 trillion won, marking a 52.9 percent on-year drop and the lowest since 2015 when the comparable figure was 26.4 trillion won.
Full-year sales are expected to reach 229.52 trillion won, a 5.8 percent fall from 2018, the tech giant said. It is the lowest level since 2016, when the comparable figure was 201.8 trillion won.
Samsung Electronics did not break down performances of its respective business divisions, saying it will announce the detailed earnings later this month.
Samsung, also the world’s largest smartphone market, has posted sluggish earnings since late 2018 due to a supply glut of chip products, following a two-year memory chip boom.
Market watchers said a supply glut of DRAM and NAND flash chips, which account for almost half of the firm’s sales, dragged down its profitability last year.—APP