Samsung Profits Not-So-Sunny
Obviously, more and more companies are going to face problems, in these "challenging economic times." Samsung is the latest to weigh in with disappointing numbers. The world's largest memory-chip and LCD manufacturer has said that their profits were wiped out this quarter, due to the global recession.
As prices have fallen for the consumer (yippee!) it's become more and more difficult for the manufacturer to earn a profit. At the moment, Samsung will be forced to rely on their mobile phone business to avoid posting their first quarterly loss.
Since Samsung makes LCD more economically than competitors LG and Toshiba, expect even larger losses from those companies.
In a report from Bloomberg . . .
“Profit expectations for Samsung keep going down, but a fourth-quarter loss as a whole would be quite negative for investor sentiment,” said Baik Jae Yer, a fund manager at Korea Investment Trust Management Co. in Seoul, who oversees $3.5 billion in equities in Seoul. “Samsung can’t be unaffected by the global economic slowdown, even if it may fare better than its competitors.”
“The economic situation is pretty bad and the peak season has passed so it will be difficult for the time being,” Korea Investment Trust’s Baik said. “Nobody is expecting demand to get better next year, so the key will be on the supply side.”
Fasten your seatbelts. It's gonna be a bumpy ride. —Leslie Shapiro