The South Korean company said operating income likely fell 22% to $9.6 billion in the final quarter of 2018 and blamed much of the decline on slowing demand for memory chips amid worsening trade relations between the US and China.
If you think dropping 40% is bad, we're learning this morning that home appliance maker LG Electronics said yesterday that its fourth-quarter operating profit plunged 79.5 percent compared with a year earlier, far below market estimates.
In a statement on Tuesday, the firm cited lacklustre demand and rising competition for its darkening outlook.
"We expect earnings to remain subdued in the first quarter of 2019 due to hard conditions for the memory business", Samsung said in its filing.
It estimates sales at 59 trillion won or about 52 billion dollars.
Samsung said a "stagnant and fiercely competitive" mobile market had weighed on earnings as marketing spend rose but smartphone sales volumes remained flat.
Apple's shares sank 10 per cent and sent shockwaves through the tech industry and global markets, as they struggle to price the threat of China's slowing economy.
Samsung has a few things to look forward to, though: Next year, the company should finally launch its first foldable phone, which might (operating word: might) stir things up a little. The company produces memory chips for smartphones, computers and many other devices.
Memory chips account for the biggest portion of Samsung's profit.
Samsung is now the world's leading manufacturer of NAND flash memory chips and DRAM chips, which provide devices with temporary workspaces and allow them to multitask. This announcement has surprised market analysts, who were expecting a much higher result in the fourth quarter.
South Korea's semiconductor exports to China dropped for the first time in more than two years in December. The company expects market conditions to improve in the second half of the year. Whether or not it's for precisely the same reasons is unclear, but it seems a plateauing smartphone market is at least partially to blame for all three companies' guidance misses.