Samsung Electronics Co Ltd tipped a shock file first-quarter revenue on Friday however market response was muted resulting from rising considerations that the semiconductor growth that has pushed the South Korean tech big’s earnings is about to finish.
Samsung shares fell after the announcement as analysts forecast related or decrease revenue within the second quarter, resulting from slower development in DRAM chip costs and better advertising prices for the flagship Galaxy S9 smartphone.
“Even when earnings begin falling within the second half, Samsung can have a robust stability sheet this yr,” stated Music Myung-sup, analyst at HI Funding & Securities, predicting looser provide of DRAM chips to begin driving down costs.
The worldwide semiconductor chief and Apple Inc smartphone rival forecast January-March revenue to leap 57.6 p.c from a yr earlier to 15.6 trillion gained ($14.7 billion), beating a mean forecast of 14.5 trillion gained from a Thomson Reuters survey of 21 analysts.
Income for the quarter was tipped to rise 18.7 p.c to 60 trillion gained, Samsung stated in a regulatory submitting. The corporate didn’t elaborate on its efficiency and can disclose detailed earnings in late April.
Samsung shares fell as a lot as 2.7 p.c on Friday earlier than paring losses to fall zero.7 p.c as of 0345 GMT (11.45 p.m. ET), in comparison with a zero.four p.c drop within the wider market.
Analysts stated Samsung’s shares had been affected by a UBS report forecasting a rise within the provide of DRAM chips utilized in servers, which dragged down Micron Know-how Inc shares greater than 6 p.c on Thursday.
The costs of NAND chips generally utilized in cellular gadgets started falling late final yr and analysts have been intently anticipating indicators of the height within the DRAM worth growth as properly.
Even when DRAM worth development is at its peak, analysts stated Samsung remained on observe for file annual earnings.
“Though good points in reminiscence chip costs have slowed from the peak of the chip growth, decrease costs might additionally improve demand for chips, and Samsung has the cost-cutting potential to maintain earnings up,” stated Greg Roh, analyst at HMC Funding & Securities.