Samsung Electronics looks like it had a pretty rough first quarter. After a 30 percent fall, Samsung Electronics faces a challenging outlook after reporting its third consecutive decline in quarterly profit.
As the second place handset maker, the crowning business despite the recent disasters in Japan is the company’s memory chip sector. Despite this, the Q1 outlook clouds over this bit of good news.
"Although the memory chip business is reviving, other operations such as telecommunications and displays are facing tough times ahead," said Han Se-woong, a fund manager at AssetPlus Investment Management, which owns Samsung shares.
Samsung's Galaxy model smartphones and tablet computers were viewed as some of the biggest potential rivals to Apple's iPhone and iPad but it has been unable to match the U.S. company's sales growth. The company also announced that it was raising the ante in a legal dispute with Apple Inc. by filing a new lawsuit against the U.S. company over alleged patent infringement. Samsung accuses Apple of violating its rights to 10 smartphone and computer patents.
The company is also facing supply shortages due to the recent earthquakes, however they still feel they’re in good shape.
"As for our company, currently we expect minimal negative impact as we have already secured most of our key components and we continuously look to diversify our supplier base," said Robert Yi, Samsung vice president, on a conference call.
With profits down, Samsung recently looked to trim some of its business to save some money as the company recently announced they were selling off its hard-drive unit.
Citing an unnamed person familiar with the matter, The Wall Street Journal reported that South Korea’s is hoping to raise about $1.5 billion in the sale, though it may settle for less than $1 billion to rid itself of the business.
Reports confirmed that Seagate was named as purchasing the HDD unit for a reported $1.38 billion.
The payment will be made half in cash and half in Seagate stock. Once completed, Samsung will own 9.6 percent of Seagate's stock and Samsung will also appoint an executive to Seagate's board of directors.
Other aspects of the deal involve a NAND flash memory agreement that has Samsung providing Seagate with its flash products for use in Seagate's solid state drives. In return, Seagate will supply Samsung with hard disk drives for its PCs, notebooks and other CE products.
Shares in Samsung, which announced earnings results during morning trading, fell 0.8 percent to close at 893,000 won after declining as much as 2.2 percent earlier.
When the WannaCry ransomware attacked companies all over the world in 2017, experts soon realized it was meant to be stopped by regular updating. Even…
TMC recently announced the launch of three new artificial intelligence events under the banner of The New Intelligence. I recently spoke with TMC's Ex…
Organizations must align internally to achieve effective innovation. Companies should consider creating cross-functional teams or, at a minimum, incre…
The three events that are part of The New Intelligence are all about how businesses and service providers, and their customers, can benefit from artif…
TMC announced the launch of The New Intelligence conference and expo - The Event Powering the AI Revolution. This exciting new event will take place o…