Samsung released a dismal preliminary earnings report Thursday night, which market-watchers are blaming on both U.S.-China trade tensions and internal missteps.
The South Korean company reports that profits are likely down more than half of what they were at the same time last year, with an anticipated operating profit now ranging between 6.4 and 6.6 trillion KRW ($5.5 to 5.6 billion USD).
While the Trump administration’s effective ban on telecom giant Huawei left the company’s chip supply business struggling, Samsung is also wrestling with issues in its smartphone division.
The rollout of the Galaxy Fold, the new smartphone in its flagship line, was less than stellar. After reviewers reported severe flaws with the near-$2,000 device, Samsung was forced to redesign the phone and delay its launch.
"That was expensive to innovate, and it didn’t work," John Jannarone, the editor-in-chief of IPO Edge, told Cheddar.
While the company has diversified across a wide range of electronic devices and hardware, Jannarone says he has particular concerns about Samsung’s deep investments in smartphones. "Unless you're Apple, these phones are all basically interchangeable. There’s a huge glut of supply."
One bright spot in Samsung’s mobile business is that Huawei’s exclusion from the American mobile phone market could make more room for Samsung’s products.
More welcome news in early reports is an $800 million reimbursement from Apple ($AAPL), after the Cupertino-based tech giant missed previously agreed-upon sales target, according to analysts that spoke to Reuters.
In the immediate fallout from the report, Samsung share prices were trading down nearly a percent on the Korea Futures Exchange.
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A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
