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- Samsung has released its quarterly earnings forecast report ahead of its full report, which is expected soon.
- The orientation report was preceded by a "warning", an unprecedented move from Samsung.
- The orientation report indicates that the company is in a desperate situation, hence the need for a precautionary warning.
Samsung, the world's largest maker of smartphones, is expected to release a full report on its results for the first quarter of 2019. In an unprecedented move for the company, Samsung sent a precautionary "warning" to investors before the publication of its report on the results forecasts (via Reuters), that Samsung has released today.
The warning preceding the earnings forecast report was disappointing for the company. Indeed, the report indicates that the company will miss the revenue forecasts and post a significant drop in its profits from one year to the next.
As a general rule, Samsung will release a report on earnings forecasts before the full report is released so investors can get a head start on all necessary decisions. This time, Samsung first issued a warning, something that the company had never seen before. Now that we have the results forecast report (which you can see here), we know why Samsung made that decision.
According to the report, Samsung is about to announce an operating profit of up to W 6,300 billion (about $ 5.5 billion) for the period from January to March this year. This is a drastic drop from the same period in 2018, when Samsung posted operating profit of 15.64 billion won (about $ 13.8 billion). This represents a very worrying loss of profit of 60%.
There are many reasons for this major collapse. The first is the general slowdown in the global smartphone market. This not only affects Samsung when it comes to its own devices, like the brand new Samsung Galaxy S10, but also when it comes to other devices. companies using Samsung components (the iPhone, for example, is equipped with Samsung screens).
The drop in chip prices, another cornerstone of Samsung's trade, is another important reason for this decline.
Overall, the situation should only get worse for Samsung if the whole industry does not recover. This is one of the main reasons why the company does everything in its power for foldable devices: if it can create a new market on which its own products are a necessity (foldable screens, for example), it can then overcome this slowdown. It is becoming increasingly clear that the so-called "golden age" of smartphones is coming to an end and that consumers will need something new to amaze them.
We will know more precisely the quarterly results of Samsung at the next publication of its full report.
NEXT: Samsung Galaxy Note 10: All rumors at the same place
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