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Seoul, January 8 (IANS) Samsung Electronics Co announced Tuesday that its operating profit plunged 28.7% in the fourth quarter compared to last year due to weak demand for memory , well below the expectations of the market.
Operating profit amounted to 10.8 billion won ($ 9.66 billion) in October-December, the South Korean technology giant said in a regulatory document. The Yonhap news agency reported that this figure was down 38.5 percent from the 15.1 billion won published a quarter earlier.
Operating profit is the lowest since the first quarter of 2017.
Sales fell 10.6 percent year-on-year to 59 billion won during the reporting period, the company said.
Operating profit was well below market expectations, which stood at 13.6 trillion won, according to a survey conducted by Yonhap Infomax, the financial arm of the Yonhap News Agency, with 23 South Korean brokerages.
Samsung has not announced the fourth-quarter net profit nor the performance of the respective divisions. The final results report will be announced later this month.
For 2018, the company expected operating profit and sales to reach W 58.9 billion and W 243.5 billion, respectively, due to strong demand for memory chips in the global market. The estimate of sales is the record annual figure.
Samsung said the demand for memory chips in the last three months of 2018 was well below market expectations as large data centers adjusted their inventories, resulting in lower prices for DRAM products.
Smartphone sales also slowed in the mature market as promotion costs in the high season reduced profitability, he noted.
"Operating profits have fallen sharply due to weak demand in the memory sector and intensifying competition in the smartphone sector," Samsung Electronics said in a rare statement for a preliminary report on the benefits.
The prices of DRAM, used for temporary storage in computer systems, fell 10% in the fourth quarter compared to the previous quarter due to weak demand for personal computers, servers and smartphones, according to the tracker. DRAMeXchange company.
Last week, Apple revised down its sales forecast for the last three months of 2018, suggesting a decline in orders from Samsung, one of the leading iPhone chip vendors.
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Updated: January 8, 2019