Samsung Electronics profit guidance misses expectations
SEOUL: Samsung Electronics Co Ltd yesterday estimated a record fourth-quarter profit but the guidance fell short of market expectations as a strong won and one-off staff bonuses took the shine off surging DRAM chip prices.
The global memory chip leader said its October-December operating profit likely jumped 64% year-on-year to 15.1 trillion won (RM56.3 billion), shy of a 15.9 trillion won average estimate from 17 analysts surveyed by Thomson Reuters. Revenue was estimated at 66 trillion won, slightly below expectations.
While the guidance put the South Korean tech giant on course for a record 2017 profit, Samsung shares fell as much as 2% amid doubts over the outlook for memory chips and smartphones. The broader market was 0.3% higher.
“The currency effect and bonuses appear to be the main reason for missing market forecasts, but smartphone shipments are also likely to be lower than expected,” said Song Myung-sup, analyst at HI Investment & Securities.
The strong won and a end-year bonus for staff in the semiconductor business are expected to have dented fourth-quarter profit by about 400 billion won and 400-500 billion won respectively.
Based on the guidance, Samsung’s 2017 operating profit is likely to come in at 53.6 trillion won, compared with the previous year’s 29.2 trillion won. – Reuters