Samsung had a good run in the past two years, but now is the time to get back to reality. Low demand for memory chips and poor performance of the Galaxy flagships led to the company announcing guidance of around KRW52 trillion in sales (14% down YoY) and only KRW6.2 trillion in operating profit, which is 60% less than the profit in Q1 2018.
|(in trillion KRW)||Q1 2019 Guidance / YoY change||Q4 2018 Report||Q1 2018 Report|
|Sales||52 / (14%)||59.27||60.56|
|Operating profit||6.20 / (60%)||10.80||15.64|
Ten days ago, an insider revealed Samsung sent a memo to investors, telling them instead of the earlier estimated KRW8 trillion, the profit is likely to dive below KRW7 trillion.
The display and memory chip market is over 75% of all the revenue for Samsung Electronics. Although the company was a market leader twelve months ago, competitors from China managed to provide better prices for LTPS LCDs, pushing manufacturers to ditch OLED. The finalized financial report will be available in the last week of this month.