Samsung Electronics’ share price sink 1.41% after firm flags 56% fall in Q2 operating profit
The group forecast its operating profit from April to June to reach around 6.5 trillion won, which would mark it the lowest profit for the firm since the third quarter of 2016.
Shares of Korean technology firm Samsung Electronics sank by 1.41% on Friday after the company said it expects operating profit to tumble 56% for the second quarter of this year due to a softening chip market.
The group forecast its operating profit from April to June to reach around 6.5 trillion won, which will be 56% lower compared to a year ago. Samsung Electronics is the flagship subsidiary of conglomerate Samsung Group.
Revenue for the quarter is projected to slip 4% to 56 trillion won.
The dip in operating profit would mark the lowest profit for the firm since the third quarter of 2016, when the firm was hit by problems of its Galaxy Note 7 catching fire which then caused the firm to recall millions of the new phones across its worldwide markets.
Samsung share price lower by 1.41%
Shares of Samsung Electronics fell by 1.41% or 650 Korean won, at 45,350 Korean won, at 11.05am Seoul time.
Year-to-date, the electronics firm’s shares have risen by 17%, from the share price of 38,750 Korean won on January 2, 2019.
Falling chip prices
Chip prices have been falling as global supply increases while demand softens.
In April, the firm pushed back the release of its new Galaxy Fold phones after reviewers claimed that they received phones with screen problems. The release of the folding handset would have spurred demand and driven sales for the quarter.
A fall in memory chip shipments to China’s Huawei also contributed to the supply glut. Companies worldwide have been forced to restrict their business dealings with Huawei to comply with United States trade sanctions.
Although the reduced intake from Huawei likely caused chip earnings to take a hit, Samsung Electronics’ smartphone sales are likely to improve from the Chinese firm’s fall in handset sales internationally.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.