South Korean brokerage houses have sharply downgraded their first-quarter earnings forecasts for Samsung Electronics and SK hynix, citing tumbling memory chip prices, a corporate tracker said on March 19.
The market consensus of Samsung’s operating profit for the January-March period stands at 8.33 trillion won ($7.36 billion), down about 47 percent from a year earlier, according to FnGuide.
The figure is also down sharply from local brokerages’ estimate of 12.32 trillion won in late December and 9.54 trillion won in late January.
The average operating profit forecast for SK hynix comes to 2.09 trillion won for the current quarter, down nearly 52 percent from a year ago.
It compares with a market consensus of 3.99 trillion won in late December and 2.29 trillion won in late January.
Some securities firms are more skeptical, warning plunging chip prices may make a dent in their earnings.
Korea Investment & Securities estimated Samsung’s first-quarter operating profit at 6.8 trillion won as prices of DRAM and NAND flash memory chips nose-dived more than 25 percent from the previous quarter.
Hanwha Investment & Securities projected SK hynix to post around 1.2 trillion won in first-quarter operating profit.
Analysts further painted a gloomy picture of their earnings for the remaining quarters, saying their operating profits are unlikely to rise on-year.
For all of this year, Samsung’s operating profit is projected to drop nearly 38 percent on-year to 36.66 trillion won, with SK hynix’s profit tipped to plunge 54.3 percent on-year to 9.53 trillion won.
By Ram Garikipati and newswires (firstname.lastname@example.org)