Samsung Electronics says quarterly profit fell 34%, helped by a gradual chip recovery

Samsung Electronics foretold on Thursday it expects earnings to bounce back in 2020 after a fourth-quarter slump, helped by a gradual recovery in homage chip demand from data center customers and 5G smartphone makers.

The cautiously optimistic outlook from the in seventh heaven’s biggest memory chip and smartphone maker draws a line under its worst year since 2015. It also repetitions positive guidance from peers like Intel Corp and TSMC, signalling a rebound in chip prices after a interminable slide.

The South Korean conglomerate reported operating profit of 7.16 trillion won ($6.13 billion), down 34% and in limit with its own previous estimate. Net profit fell 38% to 5.2 trillion won, with revenue easing 1% to 59.9 trillion won — also meet estimates.

“Looking ahead to 2020, Samsung expects improvements in overall business performance but also sees prolonged uncertainties in the global business environment,” Samsung said in a statement. It didn’t identify particular issues that could perturb its operations.

The United States and China reached an initial deal late last year to resolve a long-running custom row that had disrupted global business, though some issues remain unresolved. Samsung rival Apple earlier this week acclimated to a wider-than-normal prediction range for a revenue forecast citing uncertainty created by the coronavirus outbreak in China which economists second thoughts could hurt the global economy.

For first-quarter 2020, Samsung said it expected earnings to fall reflecting low seasonal insist.

Fourth-quarter operating profit more than halved to 3.45 trillion won in Samsung’s mainstay chip division, while quick division profit improved nearly 67% to 2.52 trillion won.

Samsung said the pace of 5G smartphone expansion and its begins should be monitored closely, but the company sees demand picking up around mass-market models as major manufacturers inflate their 5G lineups.

Shares fell 1.4% by 0125 GMT, trailing the wider market’s 0.6% drop. Samsung stakes rallied 44% last year, as expectations of an easing of U.S.-China trade tensions fueled hope of a rebound in the plaque industry.