Samsung’s Earning Guidance For Q1 2019 Estimates 60 Per cent Dip in Operating Profit

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The Korea-based company had experienced an almost similar income hit during the third quarter of 2014

Samsung has announced its earning guidance for Q1 2019 and has estimated sales for same period to be in the 51 to 53 trillion Korean won range (Approx $ 49.5 billion). The company has also estimated its consolidated operating profit to be somewhere around 6.2 trillion Korean won (Approx $5.5 billion).

Interestingly, the company had warned investors in March this year and had said that the results for the quarter might not meet expectations. Samsung had cited weak memory chip and display businesses as possible reasons behind the unexpected estimated results.

The curious case of Samsung and Apple

It is a globally known fact that Samsung is a major supplier of display screens used in Apple iPhone models and the sales of Apple iPhone models have been facing some tough times in many of Apple’s international markets. It might not be wrong to say that Samsung’s profit figures are partly tied with those of Apple. Apple Insider also reported that Apple’s smartphone sales have dipped in the recent past.

Apple had also recently forecast that it was expecting lower revenues from many of its verticals. Tim Cook, Apple’s CEO had written an open letter to Apple’s investors. As a matter of fact, Apple had revised guidance for Q1 2019.

Cook wrote,”As we exit a challenging quarter, we are as confident as ever in the fundamental strength of our business. We manage Apple for the long term, and Apple has always used periods of adversity to re-examine our approach, to take advantage of our culture of flexibility, adaptability and creativity and to emerge better as a result.”

Cook’s letter further read, “Our top models, iPhone XS and iPhone XS Max, shipped in Q4’18 — placing the channel fill and early sales in that quarter, whereas last year iPhone X shipped in Q1’18, placing the channel fill and early sales in the December quarter. We knew this would create a difficult compare for Q1’19, and this played out broadly in line with our expectations.”

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