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Samsung Electronics expects quarter earnings to miss market forecasts

FILE PHOTO of icipants at Samsung Electronics Co LtdÕs Extracted case, the testing of the new devices in San Francisco, California, USA, 20 February 2019, REUTERS/Stephen Nellis

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

In a rare announcement ahead of the actual earnings guidance, Samsung noted the weak chip demand and delay demand of the panels to customers.

“The company expects that the size of price decreases in the main memory chip products larger than expected,” Samsung said in a regulatory filing.

The South Korean tech giant is expected to publish the guidelines for the first-quarter profit beginning of the next month.

“The inventories are piling up at the memory chip side, and the weak performance of the panels business due to poor sales in Apple’s iPhones bring worse profitability for Samsung,” said Lee Won-sik, an analyst at Shinyoung Securities.

Samsung is the world’s largest memory chip maker and is also a producer of displays for smartphones.

Samsung did not elaborate on the purpose of the legal deposit. A company official confirmed that the company has not previously provided comment prior to the official earnings estimate.

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

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