Samsung Electronics predicts tough 2016 as Fourth Quarter earnings drop

Facing global economic headwinds, including a sharp fall in oil prices, Samsung Electronic’s fourth quarter earnings fell quarter on quarter (QoQ) as the components side of the business was impacted by weakened prices for DRAM chips and LCD panels due to overall softer demand in the IT market and for PCs.

In a statement announcing their financial results for the fourth quarter and FY 2015 results, Samsung said they registered KRW 53.32 trillion in consolidated revenue and full-year 2015 revenue of KRW 200.65 trillion, with full-year 2015 operating profit of KRW 26.41 trillion.

“The company is expecting challenges to maintain earnings in 2016, due to a difficult business environment and slowing IT demand. We will strive to improve performance in the second half, by capitalising on strong seasonal demand for set business products and enhancing the product mix in components business,” the statement read.

It will make efforts to secure profitability for each business unit whilst focusing on reinforcing mid- to long-term business competitiveness, including new business areas such as the Internet-of-Things (IoT). For IoT, the initial focus will be on Smart Home and Smart Health, leveraging the strength of our overall ecosystem.

Samsung unveiled the Advanced Smart TV User Experience at the CES this year. Image Credit: GadgetReview
Samsung unveiled the Advanced Smart TV User Experience at the CES this year. Image Credit: GadgetReview

For the memory business, the company plans to increase the competitiveness of its products and to solidify its technological leadership by expanding its leading-edge process. As for the System LSI business, the company plans to diversify its foundry customers and enhance the SoC (System-on-Chip) line-up.[related-posts]

In the Display Panel segment, there are plans to secure mid- to long-term growth momentum by leveraging its OLED technology for the development of new panel applications such as transparent, mirror, head-mounted and automotive displays, while strengthening its flexible display technologies.

On the mobile business, we will focus on strengthening the competitiveness of our software, along with hardware, services and wearable products. For the consumer electronics business, we will lead the Smart Home era with diverse IoT-enabled products.

Looking at the first quarter specifically, challenging business conditions will likely remain due to weak seasonal demand and a slowdown in the IT industry. Therefore, the components business will focus on expanding the proportion of value added products, while the set business will focus on major launches of its new products.

Follow the link for more details in the full statement from Samsung.


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