Samsung hit by downturn in TV sales

Steve Dinneen
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Samsung yesterday ended a record run of quarterly performances as a negative earnings guidance caused the firm’s stock to lurch.

The world’s largest memory chipmaker, which has a tradition of beating even the most bullish estimates, faces a tough outlook as a fragile world economy has hit demand for TVs and computers.

It now expects its latest quarterly results to come in below market consensus.

The news will be disappointing for Samsung investors, with the firm performing strongly over chip rival Micron and holding on to its top spot slot in TV sales against Sony and Panasonic.

Samsung, the first major global technology firm to flag preliminary September quarter results, might set the benchmark for technology investors with Intel and Advanced Micro Devices reporting numbers next week.

Shares in Samsung, Asia’s most valuable technology firm worth $116bn, closed 2.9 per cent lower, lagging a 0.2 per cent drop in Korea’s KOSPI.

Samsung, which is worth three times more than top mobile handset maker Nokia and its key TV rival Sony, has dropped one per cent this year, underperforming KOSPI’s 13 per cent rise.

After a weak start, Samsung is challenging Apple with its Galaxy S high-end smartphone, powered by Google’s Android software. It has sold more than 5m units since its June launch. Samsung is also launching its Galaxy Tab tablet computer, seen by analysts as the strongest rival to Apple’s iPad so far.

In June Samsung reported record quarterly profits thanks to an increase in sales of smartphones and memory chips.

The South Korea-based company expects consolidated operating profit of between 4.6 trillion won and 5 trillion won (£2.6bn to £2.8bn) for the three months ended 30 September. That would be higher than the 4.22 trillion won recorded in the third quarter last year but less than the 5.01 trillion won racked up in the second quarter of 2010. Samsung estimated consolidated sales of between 39 trillion won and 41 trillion won for the third quarter.