Samsung Electronics' operating profits for the last quarter of 2013 are expected to have declined due to sluggish growth in the global smartphone market. Under the circumstances, companies supplying Samsung Electronics with handset components are predicted to take a hit as well.
For example, Samsung Electro-Mechanics' operating profit estimate for the same quarter has been halved in four months, signaling an earnings shock. At present, Samsung Electro-Mechanics is supplying more than 60% of its products to Samsung Electronics. Samsung Electro-Mechanics' stock price fell 4.8% between January 2 and 3 to close at below 70,000 won.
According to financial information provider FnGuide, the estimate made by local securities companies during the past month dropped to 80.1 billion won (US$75 million) on average from 163.8 billion won (US$154 million) in early September last year.
The slump of Samsung Electro-Mechanics is mainly because of the concerns over the performance of Samsung Electronics and its high dependence on the electronics manufacturer.
