Samsung, the world’s biggest producer of semiconductors and smartphones, expects to post its first quarterly profit drop in two years as slowing sales in China weigh on earnings prospects, Reuters reports.
The Korean giant is forecast to see a 12% drop in operating profits compared with a year earlier, down to 13.3 trillion won ($11.85 billion). The preliminary Q4 results will be published on January 8.
Sales are expected to have fallen by 5%, following Samsung’s decision to cut its 2018 capital expenditure, which had fuelled a boom in memory chip sales over the past two years.
The smartphone industry was rattled last week when Apple unexpectedly warned of lower-than-expected sales on the back of weaker iPhone sales in China – the world’s largest phone market. Further bad news from Samsung will likely add further pressure to industry stocks.