SEOUL, South Korea (AFP) — Samsung Electronics on Tuesday flagged its first quarterly profit drop in two years, painting a grim outlook amid mounting competition from Chinese smartphone makers and declining chip prices.
The South Korean tech giant — the world’s top maker of smartphones and memory chips — has enjoyed record profits in recent years despite a series of setbacks, including a humiliating recall and the jailing of its de facto chief.
But operating profit during the October to December period is expected to be around 10.8 trillion won ($9.8 billion), down 28.7 percent from a year earlier, Samsung said in an earnings estimate statement.
The figure was below market consensus of about 13.5 trillion won, according to market researcher FnGuide.
Sales also dropped by more than 10 percent to 59 trillion won during the same period.
The firm has warned of lower profit until early 2019, citing a likely end to a two-year boom in memory chips that has fuelled record figures despite slowing demand for its handsets.
Samsung leads the global smartphone market by 20 percent, but faces mounting competition from Chinese rivals like Huawei — which jumped over Apple into second place last year.
Samsung withholds net profit and sector-by-sector business performance data until it releases its final earnings report, which is expected later this month.
© Agence France-Presse