The tech giant reported Thursday that operating profit plunged 34% to 7.2 trillion Korean won ($6 billion) in the quarter that ended in December compared to a year ago, in line with its forecast issued earlier this month.
Sales rose 1% to almost 60 trillion Korean won ($50.5 billion), beating expectations of a 4.4% decline.
Samsung's shares closed down 3.2% in Seoul on Thursday.
The firm attributed its latest profit drop to poor demand for display panels and "the continued fall in memory chip prices," a problem that has dogged its earnings for at least a year.
Prices of memory chips around the world have declined over the past year due to a glut in the market, though analysts are projecting a rebound in 2020 as the global supply stabilizes.
Samsung said Thursday it still expects some weak sales for a while, particularly in memory chips, display panels and consumer electronics due to lower seasonal demand over the first quarter.
Overall, however, this year could bring some relief. Samsung says it's anticipating a general pickup across its business in 2020, attributing the expected improvements to "increasing demand from data center companies" for memory chips, as well as greater adoption of 5G smartphones.
The conglomerate also posted an upswing for its mobile unit in the last quarter, "thanks to solid sales of flagship Galaxy smartphones" as well as changes to make its wider device lineup more profitable, it said.
Samsung used to sell too many smartphone models, leaving customers confused, according to analysts at Counterpoint Research. They said last fall that the company simplified its lineup in 2019, fixing that problem.
Last year, Samsung also "drastically increased its portfolio and slashed operating margin" to fend off competition from Huawei, which has made no secret of its desire to overtake Samsung as the world's biggest seller of smartphones, noted Mo Jia, a research analyst at Canalys.
"But the battle never came," he wrote in a Thursday report, pointing out that Huawei was placed on a US trade blacklist last May that stifled its overseas business.
Ultimately, Samsung managed to retain — and slightly extend — its lead in the global smartphone market in 2019, taking 21.8% share of all shipments followed by Huawei and Apple at 17.6% and 14.5% respectively, according to Canalys.
The global rollout of 5G has already provided a boost. Since hitting the market last year, Samsung's 5G smartphones have proven to be so popular that they've trumped the company's own sales targets. The company said earlier this month that it accounts for more than half the global market.
— Sherisse Pham contributed to this report.
https://news.google.com/__i/rss/rd/articles/CBMiSmh0dHBzOi8vd3d3LmNubi5jb20vMjAyMC8wMS8zMC90ZWNoL3NhbXN1bmctcHJvZml0cy1xNC1lYXJuaW5ncy9pbmRleC5odG1s0gFOaHR0cHM6Ly9hbXAuY25uLmNvbS9jbm4vMjAyMC8wMS8zMC90ZWNoL3NhbXN1bmctcHJvZml0cy1xNC1lYXJuaW5ncy9pbmRleC5odG1s?oc=5
2020-01-30 08:53:00Z
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