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Samsung Electronics forecasts record profits for Q4 of 2017, but the estimate missed analyst expectations.

The world’s biggest memory chip maker forecast operating earnings of 15.1 trillion won ($14.1billion) – up 64% from a year earlier.

However, while chip prices boosted margins, a stronger won weighed on the figures.

The record guidance comes despite a corruption scandal engulfing Samsung top leadership.

The operating profit forecast is slightly below the 15.9 trillion won estimated by analysts surveyed by Reuters.

The forecast keeps the South Korean company on track for record annual profits, in a year when prices for computer memory chips kept surging.

However, the 2018 outlook is less certain, with Samsung shares having fallen nearly 10% from their all-time high in November, as some investors bet on an end to the chip boom.

Image source Samsung

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Meanwhile, the market for smartphones and other mobile devices is facing increasing competition from Chinese rivals.


As well as the jailing of its heir apparent Lee Jae-yong for bribery and corruption, Samsung’s reputation was also hit by the global recall of its flagship Note 7 smartphone in 2016, following the fiasco with its overheating and exploding batteries.

However, the problems with the handset did not cause major disruption to Samsung’s finances, helped by its chip business as well as customers seeming unfazed by the incident.

Samsung Electronics is regarded as the jewel in the crown of the Samsung Group conglomerate, which is made up of 60 interlinked companies and is one of South Korea’s massive family-run businesses known as chaebols.

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Hyundai Motor has reported a 15% drop in its profits for the first quarter of 2013, after being hit by industrial action and the strength of the won.

The South Korean company’s net profit in the first three month came in at 2.1 trillion Korean won ($1.9 billion) compared with 2.5 trillion in the same period a year ago.

Since January, the Korean won has appreciated by 4.5% against the US dollar.

Industrial action has also hurt Hyundai’s ability to increase capacity.

Hyundai Motor has reported a 15 percent drop in its profits for Q1 2013, after being hit by industrial action and the strength of the won

Hyundai Motor has reported a 15 percent drop in its profits for Q1 2013, after being hit by industrial action and the strength of the won

Analysts said Hyundai had been hurt by the unfavorable exchange rate environment.

The strong won has made Hyundai’s vehicles less price competitive when compared to their Japanese rivals. The yen has depreciated by more than 10% since January giving a boost to Japanese car makers.

In addition, frequent work stoppages by Hyundai’s unionized workers also affected the carmaker’s earnings.

Hyundai’s labor union again refused to work last weekend – the seventh straight weekend of industrial action.

The latest stoppage resulted in production losses of about 50,000 vehicles which would cost the company nearly 1tn Korean won.

The quarterly earnings statement also revealed weak demand in the eurozone market, which led to an 11% drop in annual sales in Q1 2013.