[THE INVESTOR] SK hynix’ profits will take a downturn from the fourth quarter, said Korea Investment and Securities on Oct. 5 maintaining a “hold” recommendation.
Revenue in the third quarter will rise 16 percent on-year to 12 trillion won and operating profit by 13 percent to 6.3 trillion won but fourth-quarter earnings are likely to be adjusted lower as the price of DRAM for PCs and servers falls more than expected. The price decline will bring down revenue in the fourth quarter from the previous quarter by 2.6 percent to 11.7 trillion won and operating profit by 8 percent to 5.8 trillion won, said analyst Yoo Jong-woo.
There is a possibility that cloud computing service providers and social service media operators will slow down investing in facilities. Orders for DRAM are declining as tight supply of the product eases. Profits will remain on a downturn until the first half of 2019, and as the fall of DRAM and NAND prices will be bigger than expected, its annual operating profit next year will drop 25 percent from this year, said the analyst.
By Hwang You-mee (email@example.com)