Aju Business Daily

SEOUL -- In what was seen as an earnings shock that followed Apple's downgrade of sales forecast, Samsung Electronics posted a 28.7 percent on-year drop in its fourth-quarter operating profit due to weak demand for memory chips and slow smartphones sales.

Samsung said Tuesday in its earnings guidance that operating profit stood at 10.8 trillion won ($9.66 billion) in the October-December period, down 28.7 percent from a year ago. That was the lowest operating profit since the first quarter of 2017.

The world largest maker of smartphones and microchips attributed the drop to external uncertainties such as sluggish demand in the memory business and intensified competition in the smartphone market. Samsung said one-off expenses also contributed to the decline in earnings.

Samsung said demand for memory chips was below market expectations as major data centers adjusted inventories, leading to a price fall. The company predicted demand for memory chips would see a recovery in the second half of this year with the release of new CPUs and smartphones.