(Reuters) — Samsung stated on Wednesday it anticipated revenue to say no within the present quarter as a result of a coronavirus-related droop in gross sales of smartphones and TVs, though the chip enterprise would stay stable.
The South Korean conglomerate joined different tech giants comparable to SK Hynix and Intel in declining to supply annual forecasts due to the uncertainty in regards to the length of the pandemic.
It stated that whereas work-from-home orders and the associated progress in on-line studying would underpin demand for reminiscence chips, the outlook for smartphones and TVs was bleak as customers delay discretionary spending.
“Even as such uncertainties persist, overall conditions in the memory industry are likely to be favorable due to server and PC demand,” Han Jin-man, senior vp at Samsung’s chip enterprise, stated throughout a convention name.
In distinction, Samsung stated it anticipated its cell and TV earnings to “decline significantly” within the second quarter as customers reined in spending on non-essentials and shops and factories are closed as a result of outbreak.
The world’s high maker of reminiscence chips and smartphones reported working revenue rose 3% to six.four trillion gained ($5.2 billion) within the first quarter, fueled by stable chip demand and diminished advertising and marketing spending on telephones.
Samsung Electronics shares fell 0.3% after the outcomes on Wednesday, whereas the broader market was up 0.6%.
“Earnings will deteriorate in earnest for mobile phones, home appliances and TVs, which are weighing on stocks,” stated Park Sung-soon, an analyst at Cape Investment and Securities.
Other chipmakers SK Hynix and Intel final week posted forecast-beating first-quarter earnings, however didn’t present full-year forecasts.
Samsung’s chip enterprise posted first-quarter working revenue of three.99 trillion gained, down 3% from a 12 months earlier.
Some prospects had been additionally restocking chips due to issues about provide disruptions as a result of pandemic, boosting chip earnings, it stated.
The cell division posted working revenue 2.65 trillion gained, up 17% from a 12 months earlier.
Samsung stated that whereas cell shipments fell from the earlier quarter, profitability improved with 5G and different premium fashions making up a higher portion of gross sales.
Its show enterprise almost halved its loss to 290 billion gained from a 12 months earlier regardless of slumping telephone gross sales in China, because of a rebound in TV panel costs as a result of provide disruptions.
In March Samsung stated it will finish manufacturing of mainstay LCD panels in China and Korea by the tip of 2020, as a result of oversupply stemming from enlargement by Chinese firms.
Samsung is a diversified tech large, making telephones, TVs and residential home equipment, and elements like chips and shows utilized in client electronics. Samsung counts Apple and Huawei as each rivals and prospects.
(Reporting by Hyunjoo Jin and Heekyong Yang; Editing by Stephen Coates)