May 08, 2024

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[THE INVESTOR] The earnings of electronic parts manufacturer Samsung Electro-Mechanics will suffer an operating loss in the October-December period due to the ceased sales of tech giant Samsung Electronics' Galaxy Note 7, according to an investment report on Dec. 14.

“Samsung Electro-Mechanics is forecast to suffer an operating loss of 58.7 billion won(US$50.3million) in the fourth quarter,” said Kim Ji-san, an analyst from the electronic parts maker.

“The negative impact of the Note 7 sales suspension on the firm’s earnings is inevitable, and the company has to handle the pilling inventory”

The analyst also pointed out that the possible delay of Samsung Electronics’ Galaxy S8 could affect the earnings of the parts maker in the first quarter next year.

The upcoming Galaxy smartphone is expected to go on sale in April next year, a month later than usual.

“The sales performance of Samsung Electro-Mechanics will depend on when and whether its corporate customers adopt its dual-lens camera module,” the analyst said.

The tech giant halted the sales of the Galaxy Note 7 on Oct. 10 after a series of fire and explosion incidents of the smartphone around the world.

Samsung Electro-Mechanics’ shares were trading at 46,050 won, up 0.66, as of 11:34 a.m. on Dec. 14.

By Kim Young-won (wone0102@heraldcorp.com)