Samsung Electronics Co.'s quarterly profit and sales missed estimates on sputtering demand for memory chips during the last three months of 2018, the same quarter that Apple Inc. reported anemic sales in China.
The South Korean firm, the world's top maker of smartphones and memory chips, has enjoyed record profits in recent years despite a series of setbacks, including a humiliating recall and the jailing of its de facto chief.
In Samsung's case, the tech giant estimated its operating profit for the three months ended December was approximately 10.8 trillion Korean won (approximately $9.67 billion), which is roughly 29 percent down year-over-year and about 18 percent less than the 13.2 trillion won predicted by analysts.
Moving forward, Samsung expects its weak performance to continue throughout the first quarter of 2019.
While its chip business is usually the firm's shining light, it has suffered in the face of weakened demand from data center customers.
Smaller investment from data centres, a really bad smartphone market in China, and impact from the U.S.
Weaker earnings at the world's biggest maker of smartphones and semiconductors adds to worries for investors already on edge after Apple last week took the rare move of lowering its quarterly sales forecast, citing poor iPhone sales in China. The guidance, released Thursday ahead of full earnings later this month, didn't provide specific divisional results but did offer some clues as to how some divisions have performed, specifically its memory and mobile businesses.
Its memory-chip shipments fell 10 percent on an average in the fourth quarter, according to brokerage Eugene Investment & Securities.
One of the pillars of the tech industry, Samsung makes its own products and supplies components to other tech juggernauts like Apple.
Shares in Samsung Electronics, the flagship subsidiary of the Samsung Group that dominates South Korea's economy, were down 1.68 per cent at the close.
While Samsung leads the global smartphone market with a 20 per cent share, it faces mounting competition from Chinese rivals like Huawei - which surpassed Apple to take second place previous year - offering quality devices at lower prices.
As for the smartphone market, Samsung said it expects to boost its prospects with foldable and 5G handsets.
But he was released from jail in February past year after several of his convictions were quashed on appeal.