Still, Samsung’s earnings are set to take further hits in the coming months, Sanjeev Rana, senior analyst at brokerage firm CLSA, told CNBC’s “Squawk Box” on Friday.
“I think this earnings decline will continue for the time being, especially on the memory side,” he said, adding that the average selling price for some memory chips could fall as much as 20 percent in the next quarter and continue further declines. “We expect 2Q (second quarter) to be the profit trough for memory earnings for companies like Samsung and (SK) Hynix.”
Analysts agree that memory demand — especially from data centers — will likely recover in the second half of the year.
Friday’s weaker-than-expected operating profit number could be explained by a likely one-off provision in cost for Samsung’s memory business, according to S. K. Kim, executive director and analyst at Daiwa Securities. Excluding the one-time cost, Samsung’s guidance was similar to market consensus, he told CNBC’s “Street Signs.”
For its display business, Samsung previously said that LCD panel prices fell more than expected due to an expansion in capacity from Chinese competitors while demand from large-scale buyers of its flexible OLED display screens, which are typically used in high-end smartphones like Apple’s iPhone, also declined.
Consolidated sales for the first quarter was expected to be around 52 trillion won, down 14 percent from a year earlier, Samsung said Friday. It also missed market expectations.
In January, the world’s largest smartphone maker had issued a similar warning for the previous quarter’s earnings — operating profit for the three months ended December fell more than 28 percent annually and missed analysts’ predictions by 18 percent.
from Viral News Reports http://bit.ly/2Vog1kL
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