Full-year guidance: Samsung withdrew guidance, citing too much uncertainty.
The big number: Samsung's display business posted a $240 million operating loss, thanks to a sharp slowdown in smartphone sales. The company expects the business to stay weak in Q2, partly thanks to lower demand for TVs due to the Olympics postponement.
People are talking: "Shrinking market and store closures make a drop in earnings seem inevitable." — Samsung told investors that sales of its own-brand smartphones were going to take a hit next quarter.
Opportunities: Strength in Samsung's memory chip business made up for poor performance elsewhere. "Overall conditions in the memory industry are likely to be favorable due to server and PC demand," said Samsung chip exec Han Jin-man.
Threats: Samsung's business is very exposed to a slowdown in consumer spending. Not only does it sell TVs and smartphones directly to consumers, it also supplies components to other manufacturers. That's why the company said "overall earnings are likely to decline" next quarter, despite the memory strength.
The power struggle: COVID could slow down 5G rollouts, which could hit Samsung's network equipment business. The company warned that "5G network investments may face reductions or delays domestically and internationally." But any slowdown could be temporary, and Samsung spins it as an opportunity to improve capabilities "for the mid to long term."
Shakeel Hashim (
@shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.