While Samsung and LG are both making major product announcements in Las Vegas during CES 2019, both companies released some bad financial news. Samsung and LG each reported that investors should expect much lower profits for the just-completed fourth quarter of 2018 when it officially reveals those numbers later this month.
According to CNBC, Samsung now says it expects its operating profit for the fourth quarter to be around 10.8 trillion Korean won ($9.67 billion). That’s down 28.71 percent compared to the same period a year ago, and 18.1 percent lower than what financial analysts had predicted Samsung would report.
This is the first such decline in profits in two years for Samsung. The company claimed the lower profits were due mainly to memory chips sales made to data center customers, which were lower than expected in the quarter. However, Samsung added that both marketing expenses and flat sales in its smartphone division also led to some of its lower profits.
LG’s numbers for the quarter will be even worse. According to Reuters, the company reported that it expects its profits for the period to be 75.3 billion won ($67.03 million), or 80 percent lower compared to the same period a year ago. While LG didn’t mention any reasons for this decline, analysts have pointed to its lower smartphone sales as part of the problem, along with smaller profit margins for its big-screen TVs.