Samsung had a very bad 2019, the company’s latest earnings call has revealed. The South Korean tech giant revealed a 39% year-on-year drop in fourth-quarter net profit.
“Fourth quarter profit dropped from a year earlier due to the continued fall in memory chip prices and weakness in display panels. Improving demand for memory used in servers and mobile products, as well as solid sales of flagship smartphones, helped ease the decline in overall earnings,” The company said in a press release.
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Still more notably, that poor Q4 was a symptom of a wider downward trend across the whole year.
Samsung’s full year 2019 operating profit was down to 27.77 trillion South Korean Won (KRW). That compares poorly to 2018’s 58.89 trillion KRW and 2017’s 53.65 trillion KRW.
Samsung explained that the memory chip and display panel aspects of the business struggled, while sales of flagship smartphones and consumer electronics were more positive.
So, while Samsung struggled overall, the company claims there were some positive messages.
“Quarterly earnings improved significantly for the Mobile Business in annual terms, thanks to solid sales of flagship Galaxy smartphones and lineup changes to improve profitability for mass-market models. Profit fell from the previous quarter, however, due to the fading effect from a new flagship product launch,” was its earnings call summary.
However, the “solid” mobile sales did not result in an increased operating profit from that side of the business, with “IT & Mobile Communications” registering a lower operating profit than 2017 or 2018, despite higher sales figures.
Samsung’s shares price has taken a severe knock as a result, at time of writing it’s $1201.00, down from $1339.00 on January 20.
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Anyone who’s followed Samsung’s hectic release schedule over the last year might but not be surprised by this turn of events. At times, Samsung’s strategy has certainly seemed muddled − with numerous very similar product launches in the mobile sector and the opinion-splitting launch of the Galaxy Fold.