Samsung Electronics expects quarter one earnings to miss market forecasts

FILE PHOTO – Attendees at Samsung Electronics Co LtdÕs Unpacked event test out the company’s new devices in in San Francisco, California, U.S., February 20, 2019 REUTERS/Stephen Nellis

SEOUL (Reuters) – Samsung Electronics said on Tuesday that it expects its first quarter earnings to fall short of market expectations as declines in its memory chip prices have increased.

In a rare announcement ahead of its actual earnings guidance, Samsung pointed to weak chip demand and slowing demand from its display panels customers.

“The company expects the scope of price declines in main memory chip products to be larger than expected,” Samsung said in a regulatory filing.

The South Korean tech giant is expected to post its guidance for first quarter earnings early next month.

“Inventories piling up on its memory chip side and weak performance of its display panels business due to bad sales in Apple’s iPhones bring worse profitability for Samsung,” said Lee Won-sik, an analyst at Shinyoung Securities.

Samsung is the world’s biggest memory chip maker and also manufactures display panels for smartphones.

Samsung did not elaborate on the purpose of its regulatory filing. A company official confirmed the company has not previously provided comment before its official earnings estimate.

Reporting by Ju-min Park and Heekyong Yang; Editing by Richard Pullin

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