Samsung disappoints with weak Q4 earnings estimate

Samsung Electronics, the world's top maker of memory chips, flat screens and TVs, gave a weaker than expected quarterly earnings estimate, hit by plunging prices, sending its shares more than 1% lower.

Global technology firms are struggling with weak demand as a faltering economic recovery hit sales of computers and flat screen TVs after a year of strong growth in the chip and display markets.

The memory chips business, Samsung's mainstay business, is widely expected to see growing supply, bringing a quick end to the sector's one-year boom but some analysts are optimistic.

"I think its chip business has hit the bottom in the fourth quarter, and will start recovering in the first quarter," said Lee Jeong, analyst at Hana Daetoo Securities.

"The biggest risk in the short term for Samsung is the seasonal factor, as IT demand usually slows during this period. Much will depend on how well Samsung overcomes this off season."

Samsung, which has a tradition of beating even the most bullish estimates, expects its operating profit to come in at 3.0 trillion won ($2.67 billion) for October-December. It provided a range of 2.8 trillion won to 3.2 trillion won, lower than a consensus forecast of 3.4 trillion won polled by Thomson Reuters I/B/E/S.

That would be down from 4.9 trillion won for the preceding quarter and versus 3.4 trillion won a year ago.

After a weak start, Samsung is challenging Apple with its Galaxy S high-end smartphone, powered by Google's Android software and its Galaxy Tab is being seen by some analysts as the strongest rival to Apple's iPad so far.

Shares in Samsung, the No2 producer of mobile phones, have jumped 25 percent since November. The shares struck a record high on Monday on expectations of a recovery in profits and slipped 1.4 percent on Friday in a steady broader market.

Samsung's shares have far outpaced a 10% gain in the broader market since November and versus a rise of about 5% in the FTSE global technology sector index.