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Samsung warns of This autumn revenue drop, blames unexpectedly low semiconductor demand

Apple isn’t the one smartphone maker steeling itself (and analysts) for disappointing outcomes. Samsung Electronics issued earnings guidance for...

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Samsung warns of Q4 profit drop, blames unexpectedly low semiconductor demand

Apple isn’t the one smartphone maker steeling itself (and analysts) for disappointing outcomes. Samsung Electronics issued earnings guidance for the ultimate quarter of 2018 at the moment that not solely marks its first quarterly revenue decline in two years, but in addition fell far under analysts’ expectations. The corporate attributed the drop to lower-than-expected demand for its reminiscence chips, which in earlier quarters had helped bolster its earnings even when its smartphone enterprise was lackluster.

Samsung Electronics mentioned it expects consolidated working revenue of about 10.eight trillion received ($9.67 billion), a 28.7 p.c drop from the 15.15 trillion received it recorded in the identical interval a 12 months in the past, and under the 13.2 trillion received that analysts polled by Thomson Reuters had predicted. Consolidated gross sales are anticipated to be about 59 trillion received, a 10.6 p.c lower from 65.98 trillion received a 12 months in the past ($52.9 billion). Analysts had estimated gross sales of 62.eight trillion received.

In a press release, the corporate mentioned “we count on earnings to stay subdued within the first quarter of 2019 attributable to troublesome circumstances for the reminiscence enterprise,” because of unexpectedly weak demand from a few of its knowledge middle clients.

Final week Samsung rival Apple lowered its first-quarter earnings guidance, as CEO Tim Prepare dinner mentioned that the corporate now anticipated income of $84 billion, down from its preliminary projection of $89 billion to $93 billion. The corporate blamed sluggish demand in rising markets, however, normally, the smartphone market has been underwhelming over the previous two years.

A few 12 months in the past, Gartner recorded the first ever decline for world smartphone gross sales since 2004, when it first started monitoring the market. It attributed the drop to 2 primary components: fewer function telephone house owners upgrading to smartphones due to the shortage of high quality “ultra-low-cost” smartphones, and present smartphone house owners deciding to purchase and preserve high quality units for longer durations of time.

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