Samsung logo at store in Shanghai. A South Korean multinational conglomerate.
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Samsung Electronics said Wednesday it expects a decline in overall earnings for the three months ending in June due to the coronavirus pandemic.
The virus, which causes the disease Covid-19, has infected more than 3.1 million people worldwide in just a few months and killed over 216,000.
Samsung warned sales and profits of smartphones and TVs are “expected to decline significantly as COVID-19 affects demand and leads to store and plant closures globally.” It added that there is a possibility it might delay or cut back its investment in 5G technology.
Still, Samsung said it plans to go ahead with the launch of new models for its foldable smartphones and the Galaxy Note in the latter half of the year despite lingering uncertainties.
Other tech companies, including Apple, have issued similar warnings as the global economic downturn caused by the virus outbreak forces people to cut back on nonessential spending.
But as millions around the world are being forced to stay indoors, Samsung’s main profit-making memory business stands to benefit.
The tech giant said it expects continued robust demand for its chips used in servers and PCs as more people work from home, consume streaming content and participate in online education. Samsung’s memory components are used in data centers, PCs and smartphones.
“Looking ahead to the second quarter, the Company expects the memory business to remain solid, but overall earnings are likely to decline from the previous quarter because COVID-19 will significantly impact demand for several of its core products,” Samsung said in a statement.
For the three months ended in March, Samsung reported its operating profit was 6.45 trillion Korean won (almost $5.3 billion), in line with earlier guidance, as earnings from the memory business offset the weakness in its consumer electronics division and display business. Revenue came in at 55.33 trillion won.
Samsung shares traded up 0.6%.