Samsung Electronics flags 60pc fall in Q1 operating profit

Samsung set to launch first 5G smartphone

It would represent the firm's lowest operating profit since the third quarter of 2016 and comes after it reported its first fall in quarterly profit for two years in January.

The net profit of KOSPI-listed companies continued to reach an all-time high until the first half of previous year but the growth rate started to slow down from the third quarter.

The expected average was already significantly lower as the world's largest memory chip and smartphone maker last week warned investors of weaker-than-expected earnings, citing sluggish memory chip and display sales.

Samsung hopes to improve its profits later this year with a rise in demand for server DRAM and higher than expected Galaxy S10 foldable-phone sales.

Whilst the announcement is a preliminary release, a more detail breakdown and final figures will be disclosed in coming weeks. The Korean giant is banking on electronics sales to offset falling chip prices, and decreased OLED screen demand (e.g. within Apple iPhones).

Samsung issued a rare warning last month that its results would be short of estimates, reflecting slower orders from data centre owners such as Amazon.com and handset makers including Apple.

Oil price hits highest level in 2019
Net U.S. crude imports rose last week by 386,000 bpd while exports dropped by 163,000 bpd to 2.7 million bpd. Supply from OPEC countries hit a four-year low in March, a Reuters survey found this week.

We still have no idea how much the Galaxy S10 5G will cost in the USA, but it'll probably be more expensive than all the other S10 phones.

"The company will seek to improve cost competitiveness through effective resource management", it added, "while enhancing product quality in the short term".

Now the pressure will be on the mobile division, which launched the Galaxy S10 earlier this year, to protect profits from further declining in the second quarter. They cautiously predict demand will recover around the end of the year. Samsung also plans to reduce spending and focus on profitability for its memory facilities.

"Merger and acquisitions related to the 5G business are now under way", Koh said. The 5G version of the smartphone began to be sold in South Korea on Wednesday. "We have been stepping up efforts to win equipment contracts in India, Japan, Europe".

Samsung shares fell 0.5% in early Seoul trade on Friday.

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