Samsung falls on 2nd day after global slowdown warning
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Samsung Electronics Co., the world's largest maker of smartphones, fell for a second day in Seoul trading after warning about a slowdown in global demand and saying a stronger won will cut operating profit this year.
The company dropped 3.2 percent to close at 1,372,000 won, the lowest since Nov. 20. The company, also the world's largest maker of TVs, declined 2.5 percent on Jan. 25.
South Korea's biggest company by market capitalization said Jan. 25 it expected "somewhat weaker" demand for smartphones this year amid market saturation in developed nations and competition in the low-end sector for Chinese suppliers. Apple Inc. has also plunged 17 percent this year on concerns about smartphone demand.
"Strong growth in the smartphone market has come to an end," said Doh Hyun Woo, a Seoul-based analyst at Mirae Asset Securities. "There are also persistent concerns about Samsung's first-quarter earnings."
The electronics company may report net income as low as 8 trillion won in the period, Doh said. He had earlier expected 8.8 trillion won, he said.
The stronger won may cut operating profit by 3 trillion won ($2.8 billion) this year, Samsung said Jan. 25. The currency has jumped about 1.7 percent against the dollar since Sept. 28, compared with a 14 percent decline for the yen, according to data compiled by Bloomberg. A stronger won cuts the repatriated value of South Korean exporters' overseas sales.
The company boosted fourth-quarter net income 76 percent to 7.04 trillion won, surpassing the 6.8 trillion-won average of analyst estimates compiled by Bloomberg.