SK Hynix Inc, a supplier for Apple Inc, posted profit for the fourth quarter of last year that missed analysts’ estimates as sluggish demand for smartphones and personal computers exacerbated declining memory chip prices.
Operating income fell to 988.9 billion won (US$820.71 million) in the three months ended December last year, the Icheon, South Korea-based company said yesterday.
That compares with the 1.04 trillion won average of analyst estimates compiled by Bloomberg and is the smallest in two years.
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China’s slowing economy and weakening demand from smartphone customers is crimping demand for components and accelerating price declines for memory chips. Prices for DRAM chips averaged US$1.93 in the quarter, compared with US$3.77 in the same period in 2014, according to data from inSpectrum Inc.
“The market expectations have been lowered recently, so overall, the results weren’t as bad as feared,” Korea Investment & Securities Co Seoul-based analyst Jay Yoo said. “Still, no sharp turnaround in demand is expected in the short term and the market will have to maintain its conservative outlook for the year.”
SK Hynix shares slipped 0.5 percent yesterday to close at 27,850 won in Seoul. Including yesterday’s fall, the stock has dropped 9.4 percent this year compared with a 4.6 percent decline in the benchmark KOSPI.
Apple, which accounts for 11 percent of Hynix’s sales, is due to report earnings this week.
There have been signs suggesting that iPhone sales might be slowing. According to several analysts, Apple has cut orders to its suppliers for phone components, indicating that the Cupertino, California-based company might not sell as many handsets in the first quarter this year as originally anticipated.
SK Hynix’s net income excluding minority interest was 870.3 billion won, beating the 808.6 billion won average of analyst estimates.
“The PC market demand recovery will be limited while the global economic uncertainty will persist into the first quarter of this year,” SK Hynix president Kim Joon-ho said on a conference call. “However, demand for high density mobile DRAM is expected to continue to grow with the launch of major high-end smartphones.”
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