| | | Samsung Cuts Back Capital Spending as Earnings Top Estimates
By Sam Kim
October 30, 2018, 7:43 PM EDT Updated on October 30, 2018, 11:08 PM EDT
- Capex to drop to 31.8 trillion won in 2018, down 27%
- Chip, displays lead growth as smartphone sales stagnate
Samsung Electronics Co. posted quarterly profit that topped analyst estimates on growth in its memory chip business, but signaled caution in semiconductors by announcing a cut in capital spending for the year.
Net income rose to 13 trillion won ($11.4 billion) in the three months ended September, the Suwon, South Korea-based company said in a filing Wednesday. That compares with the 12.9 trillion won average of estimates compiled by Bloomberg. Capital spending this year will drop 27 percent to 31.8 trillion won.
Samsung said it’s seeing “weak seasonality” for the chip market in the fourth quarter, and warned that earnings would decline in the period. Assessing demand for memory forms the heart of Samsung’s business plans as the semiconductor division provides the biggest chunk of profits for the company that also makes smartphones and display panels. As it becomes more and more difficult to cut costs in memory production, manufacturers such as Samsung scrutinize prices while adjusting spending on plants and equipment.
continues at bloomberg.com |
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