Korean Economy News
Samsung Elec OP Q4 dn 39% on qtr, back to pre-boom figures of 2 yrs ago

Lee Ha-yeon

Samsung Electronics reported a bigger-than-expected 38.5 percent dip in its operating profit in the final quarter ended in December against the third quarter as chip-led hot streak peaked out.

In its guidance for fourth-quarter earnings, the world’s largest chipmaker in a disclosure statement on Tuesday estimated its operating profit for the October-December period plunged 38.5 percent from the historic level of 17.57 trillion won in the third quarter to 10.8 trillion won ($9.7 billion), its poorest performance since 9.9 trillion won in the first quarter of 2017. Against a year-ago, it was down 28.7 percent.

Sales also fell 9.9 percent on quarter and 10.6 percent on year to total 59 trillion won.

The figures were sharply below the market consensus of 13.38 trillion won in operating profit on sales of 63.21 trillion won, and will likely to deliver an upset to the local market as big as the Apple shock.

In the third quarter, the world’s largest chipmaker earned 13.65 trillion won alone from its chip division, or 78 percent of total income in the three-month period for the company that also manufactures smartphones, home appliances and displays. The company reports detailed quarterly performance in the end of January.

The disappointment was expected as the chip industry entered a down cycle after two years of sizzling growth. The price of 8-gigabyte DDR4 DRAM memory chips slumped to $7.25 in December from $8.19 in September.

For full 2018, the company estimated that its operating profit would reach 58.9 trillion won, up 9.8 percent from a year ago, and sales would increase 1.6 percent on year to 243.51 trillion won.

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