Samsung Q3 Profit Down 53%

(RTTNews) - Samsung Electronics Co Ltd (SMSN.L, SSNNF.OB, SSNLF.OB) reported a profit for the third-quarter that dropped about 52.9 percent from last year, reflecting continued weakness in the memory chip market. Quarterly operating profit also dropped 55.7 percent from last year, while sales decreased about 5.3 percent.

Looking ahead to the fourth quarter, the company expects demand for components to turn sluggish in general amid weak seasonal effects, while marketing expenses are likely to increase to address year-end smartphone sales.

Memory chip demand is seen rising slightly quarter-on-quarter on the back of inventory building by customers in response to global macroeconomic uncertainties.

The company expects fourth-quarter earnings in the Mobile Business to decrease quarter-on-quarter as marketing costs are set to rise and shipments to decline slightly, with flagship model sales weakening from their post-launch peaks.

For 2020, the company expects growing sales in 5G products and foldable devices. The logic chip business is forecast to report accelerated growth as it expands mass production of next-generation extreme ultraviolet lithography (EUV) based products.

Samsung reported that net income attributable to the shareholders of the parent company for the third-quarter of 2019 dropped 52.92 percent to 6.11 trillion Korean won from 12.97 trillion won last year.

Earnings from the memory business slumped significantly year-on-year as memory chip prices continued its downward trend amid the industry-wide weakness since the end of 2018.

The company's operating profit declined 55.74 percent to 7.78 trillion won from 17.57 trillion won last year.

Sales for the quarter declined 5.28 percent to 62.00 trillion won from 65.46 trillion won in the prior year.

The Semiconductor Business posted consolidated revenue of 17.59 trillion won and operating profit of 3.05 trillion won for the quarter.

The Display Panel Business posted 9.26 trillion won in consolidated revenue and 1.17 trillion won in operating profit for the third quarter.

The IT & Mobile Communications Business posted 29.25 trillion won in consolidated revenue and 2.92 trillion won in operating profit for the quarter.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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