Samsung warns of tough year

Gold-Rush-Eating-boots-N_54Samsung has warned that this year is going to be tougher than an old boot and twice as hard to swallow.

In a statement, Samsung said it is expecting a difficult business environment in 2016 due to weak global economic conditions and heightened competition in key businesses including memory chips and smartphones.

Chief Executive Kwon Oh-hyun told employees in a New Year’s address that low global growth will persist this year, with greater uncertainty stemming from issues such as financial risks for emerging countries.

He didn’t talk actual dollars but his comments come amid growing concerns that October-December results for the world’s biggest maker of smartphones and chips may be weaker than previously expected.

On the back of the comments, Korea Investment lowered its estimate for Samsung’s fourth-quarter operating profit to $5.41 billion.

Kwon also warned of greater competition in the firm’s main businesses, Samsung said in its statement, without offering detailed financial forecasts.

The firm is expected to issue official earnings guidance for the October-December period at the end of the week. It already said in late October that operating profit for the quarter will be lower than July-September earnings, citing seasonally weaker demand for its component businesses.