Samsung Electronics announced it is expecting drop in revenue and operating profit due to weakness in its display and memory business in the first quarter of 2019.
Samsung said its revenue will reach 52 trillion Korean won and operating profit will be 6.2 trillion Korean won in the first quarter of 2019.

South Korea’s Samsung said on Friday its first-quarter operating profit likely slid 60 percent from a year earlier, as a glut in memory chips, slowing panel sales and rising competition in smartphones hit margins.

The world’s biggest maker of smartphones and memory chips said in a filing January-March profit was likely 6.2 trillion won or $5.5 billion.

Revenue likely fell 14 percent from a year earlier to 52 trillion won. The firm will disclose detailed earnings in late April.

The Apple rival earlier had warned the quarter could be disappointing due to falls in prices of memory chips, its core profit-driver, and slowing demand for display panels used in Apple’s iPhones. Samsung supplies memory chips to mobile handset makers and enterprise server companies.

Samsung’s smartphones are struggling to be profitable due to rising costs of innovation, competition from Chinese rivals and weakening demand for premium models.

The tech giant says earnings are expected to recover in the second half of the year thanks to rising demand from data centres.

For its display business, Samsung had said that LCD panel prices fell more than expected due to an expansion in capacity from Chinese competitors while demand from large-scale buyers of its flexible OLED display screens, which are typically used in high-end smartphones, also declined.

Samsung’s operating profit for the three months ended December fell more than 28 percent annually.