Samsung Electronics' first-quarter earnings are expected to be well below the expected level. In a public notice on March 26, Samsung Electronics said its first-quarter earnings are expected to fall below the market's expected level due to a weak environment in its display and memory businesses.
Although markets initially predicted Samsung Electronics' first-quarter performance to be around $8 billion (8 trillion won), some recently predicted that it would be worth $6 billion (6 trillion won).
This is the first time that Samsung Electronics has explained its quarterly earnings outlook through public disclosures. Regarding the announcement of such an unusual measure, there is a view that it may be a precautionary step to minimize the impact of the earnings shock.
According to the disclosure, Samsung Electronics saw its LCD panels enter off-season in its display business and the price falling gap widened from the earlier estimate as Chinese panel manufacturers increased their production capacity and expanded supply.
It also forecast that the demand from large flexible OLED customers has decreased and its profitability has deteriorated due to continued price competition with LCDs, weakening its performance against market expectations.
The overall weak demand for memory products also continued as the market entered an off-season, and that the price drop of major products expanded in part from what it had originally predicted.
In order to tide over difficult business conditions, Samsung Electronics said it will seek to improve cost competitiveness through efficient resource management while strengthening product differentiation based on technological leadership in the short term.
