Samsung Electronics’ first-quarter profits in all probability fell almost 60 percent from a year ago due to weakness in its display and memory business.
Still, Samsung’s earnings are set to get further hits in the coming months, Sanjeev Rana, senior analyst at brokerage firm CLSA, told CNBC’s “Kick Box” on Friday.
“I think this earnings decline will continue for the time being, especially on the memory side,” he said, summing that the average selling price for some memory chips could fall as much as 20 percent in the next district and continue further declines. “We expect 2Q (second quarter) to be the profit trough for memory earnings for companies like Samsung and (SK) Hynix.”
For its stretch business, Samsung previously said that LCD panel prices fell more than expected due to an expansion in gift from Chinese competitors while demand from large-scale buyers of its flexible OLED display screens, which are typically in use accustomed to in high-end smartphones like Apple’s iPhone, also declined.
Consolidated sales for the first quarter was expected to be throughout 52 trillion won, down 14 percent from a year earlier, Samsung said Friday. It also slipped market expectations.
In January, the world’s largest smartphone maker had issued a similar warning for the previous quarter’s earnings — run profit for the three months ended December fell more than 28 percent annually and missed analysts’ prophecies by 18 percent.