Samsung today said in a regulatory filing that its earnings for the fourth quarter of 2018 have likely dropped sharply due to weak memory chip demand and growing competition in the smartphone business.
As noted by Reuters, Samsung's operating profit for the three months ending in December was at approximately at 10.8 trillion Korean won, aka $9.67 billion, well below the 13.2 trillion won predicted by analysts and a 29 percent drop from the year-ago quarter.
This marks Samsung's first decline in quarterly operating profit in two years, with more detailed information set to be announced during Samsung's earnings in January.
The news about Samsung comes after Apple last week announced that it was lowering its revenue guidance for the first fiscal quarter of 2019, aka the fourth calendar quarter. Apple cited a number of reasons for the guidance downgrade:
- iPhone XS, XS Max, and XR launch timing compared to iPhone X timing in 2017
- A strong U.S. dollar
- Supply constraints on Apple Watch Series 4, iPad Pro, AirPods, and MacBook Air
- Economic weakness in emerging markets, specifically China
- Trade tensions with China
- Lower than anticipated iPhone revenue, primarily in China
- Weak iPhone upgrade numbers in some developed markets due to fewer carrier subsidies and low-priced battery replacements in 2018
Apple lowered its guidance to $84 billion, down from the $89 to $93 billion guidance that was shared in November. At $84 billion, Apple will see a year-over-year revenue drop in 2019 after pulling in $88.3 billion during the first fiscal quarter of 2018.