Samsung Electronics said its revenue rose 5.5 percent to 65.5 trillion won or $57.46 billion in the third quarter of 2018.
Samsung said it faced tough market conditions in telecom network market due to drop in sale of LTE equipments. Samsung is expecting to sell 5G equipment to top telecom operators in the US and Korea in Q4 2018 and 2019.
Samsung forecast weaker earnings in Q4 as it posted record operating profit in the third quarter of 2018 driven by semiconductor sale to data centers, Reuters reported.
The South Korean technology company said it expected a quarter-on-quarter earnings decline in the fourth quarter as the memory chip market entered a period of seasonal weakness ahead of a pick-up in 2019.
The world’s biggest maker of memory chips and smartphones said its operating profit grew 21 percent from a year ago to 17.6 trillion won or $15.5 billion in the July-September period.
With chip prices weakening or falling after years of stellar growth, some analysts expect the third or fourth quarters to mark a peak in earnings for the Apple supplier and smartphone rival.
Efficiency improvements and cost-cutting in the chip business, which accounts for about 78 percent of Samsung’s operating profit, mean the landing may be a soft one.
“Since Samsung continues to reduce the costs of semiconductors, it is not likely to witness a so-called hard-landing situation,” said Avril Wu, senior research director at DRAMeXchange.
Samsung said the memory chip market would slow down in the first quarter of next year then regain stability as server demand picked up in the following quarter.
The semiconductor business booked 3.7 percent rise in operating profit to 13.7 trillion won, while the mobile business posted 1 percent fall in operating profit to 2.2 trillion won.
With the softer memory market, Samsung flagged 27 percent cut in capital expenditure to 31.8 trillion won in 2018, compared with a record 43.4 trillion won last year as it expanded its foundry business.
Samsung forecast chip prices to stabilize in the second quarter of 2019, in line with the outlook given by South Korean peer SK Hynix last week.
