Samsung sees 2nd-quarter profits fall as coronavirus hits sales
Recession-wary consumers have slowed purchases of TVs and smartphones
SEOUL - Samsung Electronics Co Ltd said on Wednesday it expected its profit to decline in the current quarter, as strength in the chip business would be offset by a sales slump in smartphones and TVs.
Samsung said its first-quarter operating profit rose 3 percent in the January-March period, in line with an earlier estimate, as the stay-at-home trend due to the COVID-19 pandemic cushioned the virus blow.
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The South Korean tech conglomerate's chip business is benefiting from demand for servers and computers as stay-at-home orders force millions of people around the world to convert their homes into offices.
But sales of TVs and smartphones have slowed as recession-wary consumers postpone purchases of non-essential consumer electronics, a trend seen across the global tech industry.
"Sales and profits of set products business, including smartphones and TVs, are expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally," Samsung said in a statement.
The world's top maker of memory chips and smartphones reported an operating profit of 6.4 trillion Korean won ($5.2 billion), compared with 6.2 trillion won a year ago and its earlier estimate of 6.4 trillion won.
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It said net profit fell 3 percent to 4.9 trillion won, while revenue climbed 5.6 percent to 55.3 trillion won.
Samsung Electronics shares fell 0.8 percent in a flat wider market in morning trade on Wednesday. The shares are down 10 percent so far this year, in line with the wider market.