Samsung profit estimates beat forecasts, earnings likely fell 34%

Samsung Electronics Co Ltd on Wednesday flagged a smaller-than-expected fall in quarterly operating profit, indicating that memory chip prices bottomed out quicker than analysts had anticipated, strengthening hopes of a recovery.

The world’s biggest memory chip maker has struggled since late 2018 as a weak global economy curbed spending by data centre customers and rising inventories of memory chips squeezed prices, ending a two-year industry boom.

But hopes for a rebound in chip prices are gaining momentum, and an expected easing in the US-China trade war is lifting optimism that demand from server and 5G smartphone customers will return this year.

Operating profit in the quarter ended Dec. 31 likely fell 34 per cent to 7.1 trillion won (4.6 billion pounds) from 10.8 trillion won a year earlier, Samsung said. That came in ahead of the 6.5 trillion won forecast from Refinitiv SmartEstimate.