After Apple, Samsung Records a 31% Drop in Net Profits: Are Big Phone Makers in Trouble?
Apple has struggled to win over the Chinese mobile phone market as reports have suggested but Samsung is also having a similar issue.
Samsung Electronics revealed that it recorded a 31 percent decline in net profit in the fourth quarter of 2018 as the operating profits of its mobile business plunged by nearly 33 percent.
Chart via TradingView
Samsung Sees Large Net Profit Declines
Analysts at Samsung attributed the overall decline in profits to various geopolitical factors including the U.S.-China trade war.
Due to macroeconomic uncertainties, the company said that its memory business will likely not strongly rebound until the second quarter of 2019.
“Looking ahead, Samsung expects demand in the memory business to remain weak in the first quarter due to seasonality and macroeconomic uncertainties as well as inventory adjustments by major customers,” Samsung said.
CW Chung, an analyst at Nomura, told The Wall Street Journal that Nomura also sees Samsung beginning 2019 with a tough first quarter and gradually recovering in the latter half of the year.
“We expect Samsung’s quarterly earnings to reach the trough in the first quarter of 2019 and begin to recover from the second half,” CW Chung said.
TrendForce has reported that the price of dynamic random-access memory (DRam) is set to fall by over 20 percent in the first quarter of this year, which will contribute to the company’s hardship in the next two months.
But, despite the slowdown in the global economy, the South Korea-based electronics giant said that as the demand for memory products picks up,