Samsung hit by weak TV sales

 
City A.M. Reporter
Samsung Electronics Co's disappointing earnings guidance sparked slowdown worries as prices of its key products slide, hitting shares and ending the technology group's run of record quarterly performances.

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.

The International Monetary Fund expects global growth to slow to 4.2 per cent next year from a forecast of 4.8 percent for this year, dragged by advanced economies.

Samsung, also the world's No.2 maker of mobile phones and the No.1 maker of LCDs, estimated its July-September operating profit and sales to come below market consensus.

"LCD (liquid crystal display) and TV performance appears to be worse than expected and the downward pressure on earnings will only grow as chip prices are also falling and TV makers increase price cuts," said Chung Young-woo, an analyst at Korea Investment & Securities.

"Usual uptick in seasonal year-end demand will be smaller this time and an earnings recovery is unlikely until early next year."

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.

Samsung has performed strongly over chip rival Micron and held on to its No. 1 slot in TVs against Sony Corp and Panasonic.