Samsung Q4 2019 earnings guidance

Samsung logo at store in Shanghai. A South Korean multinational conglomerate.

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Smartphone giant Samsung Electronics said on Wednesday its operating profit for the three months that ended in December likely fell about 34% from a year ago.

Operating profit for the fourth quarter is expected at 7.1 trillion Korean won ($6.02 billion), down from the 10.80 trillion won Samsung posted a year earlier. That projection was better than the 6.5 trillion won predicted by Refinitiv SmartEstimate.

Samsung expects consolidated sales for the quarter to be around 59 trillion won.

In the previous three quarters, Samsung’s operating profit had more than halved from the same period a year earlier.

Like other chipmakers, the South Korean tech giant has been struggling in an environment where price and demand for memory chips have been low for a prolonged period, due to inventory adjustments and a supply glut.

Memory components used in smartphones and data centers make up Samsung’s main profit-making business.

Still, analysts say there could be a slow recovery in the semiconductor space as market conditions improve and after the U.S. and China reached the first phase of a trade deal to ease tariff tensions.

For its part, Samsung previously predicted “solid” demand in the memory business for 2020, but cautioned against lingering uncertainties. In the three months that ended in September, the tech giant posted an operating profit of 7.78 trillion won, which was up almost 18% from the quarter before.

Samsung shares traded higher by about 1.8% on Wednesday.

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