[THE INVESTOR] Samsung Electronics’ earnings will likely take a downward turn for the first time since the second quarter last year due to US tech giant Apple’s cut in OLED display orders, according to market analysts on March 27.
The market consensus for Samsung’s operating profit in the January-March period stood at 14.6 trillion won (US$13.60 billion), down 3.71 percent from the previous quarter, according to market research firm FnGuide. In the second quarter, sales are estimated at 61.7 trillion won, down 6.51 percent on-quarter.
“The first quarter has traditionally been an off-season in the global display market,” said a Samsung Display spokesperson, declining to comment on the earnings estimates.
Samsung Electronics posted record earnings for the third consecutive quarter since March last year on the back of strong demand for smartphone chips and displays. In the fourth quarter of 2017, the tech giant logged 15.2 trillion won in operating income, up 63.8 percent on-year.
Meanwhile, the display unit of Samsung earned 1.18 trillion won in operating income in the fourth quarter, but the figure will likely drop by more than a half.
Samsung is the world’s largest smartphone OLED maker and the sole display supplier for Apple’s iPhone X.
Apple initially received more than 100 million units of OLED panels from Samsung, but the supply volume will likely be reduced to 70 million on dwindling demand. But it’s not all bad news since Apple reportedly will be ordering 120 million OLED panels for its next-generation iPhone later this year to boost the profits of Samsung’s display business in coming months.
“Some 90 percent of Samsung’s OLED production lines will be in operation starting in June to fulfill Apple’s orders for the new iPhone,” said Kim Dong-won, an analyst from KB Investment & Securities, in an investment report.
By Kim Young-won (email@example.com)