The South Korean technology giant said Friday that it expects operating profit for the first quarter to plunge by 60% compared to the same period year ago.
Samsung(SSNLF) warned last week that its earnings would be hit by slowing demand for memory chips and display panels, a sign that device makers and their suppliers are coming under pressure.
The company estimated Friday that operating profit for the first three months of 2019 will total 6.2 trillion Korean won ($5.4 billion), lower than analysts' already downbeat expectations.
It expects to report a sales decline of roughly 14% when full earnings are published later in April.
Samsung is the world's biggest seller of smartphones. But it also has a huge business making key components for rival handset manufacturers. That means it suffers on both fronts when the industry runs into trouble.
The global market for smartphones shrank more than 4% in 2018 and could contract again this year, according to market research firm IDC.
China, the world's biggest market for the devices, has been particularly weak. Apple(AAPL) stunned global markets in January when it said iPhone sales would come in lower than expected.
A range of factors are hurting the industry, including increasingly saturated markets, consumers replacing their phones less often and frustration over rising prices.
Samsung's stock was little changed in Seoul trading Friday, as investors had largely predicted the earnings slump.
Some analysts think the downturn in earnings could be short-lived.
Investment research firm Fitch Ratings pointed out that demand for advanced chips was rising in areas like autos and industrial sectors, with Samsung well-positioned to benefit.
"We believe that Samsung's results are likely to recover towards the end of this year," Fitch analyst Shelley Jang wrote in a note to clients Friday.
Tesla chief Elon Musk told reporters outside the Manhattan Federal Courthouse that he was "very happy" over the outcome of the SEC's latest complaint against him. The commission sought to hold him in contempt for violating their previous settlement over a financially relevant tweet, after all, but the judge has merely ordered both parties to resolve their dispute outside of court. "Take a deep breath, put your reasonableness pants on, and work this out," District Judge Alison Nathan said during the hearing.
The SEC brought him to court for the second time after he tweeted a photo of Tesla's facility and followed that up by saying that the automaker will manufacture 500,000 cars in 2019. He corrected himself in another follow-up and clarified that 500,000 is merely the expected production rate. Tesla still expects to deliver 400,000 vehicles for the year, which is consistent with previous guidance. Clearly, his clarification wasn't enough for the SEC.
Tesla made 0 cars in 2011, but will make around 500k in 2019
Musk had to step down as Tesla chairman and pay $20 million in penalty the first time the Securities and Exchange Commission filed a lawsuit against him over tweets about taking Tesla private. The agency said his proclamation that the company already has the funding to take the automaker private constitutes fraud for being "false and misleading."
While that lawsuit also sought to ban the executive from serving as an officer of a public company, Musk's deal with the SEC ultimately allowed him to keep his role as Tesla's CEO. Also part of that deal? Having tweets that contain material information about Tesla's vehicle production pre-approved by one of the company's lawyers.
The commission said that by tweeting the 500,000 production outlook for the year, Musk shared "inaccurate and material" data, one that wasn't reviewed by Tesla's lawyers. Musk argued, however, that he had the right to decide whether a post needs pre-approval and that the tweet in question was immaterial to shareholders. He said in a statement provided to Reuters:
"I have great respect for Judge Nathan, and I'm pleased with her decision today. The tweet in question was true, immaterial to shareholders, and in no way a violation of my agreement."
Judge Nathan gave both parties two weeks to hammer out an agreement. If they still don't reach one by that time, then that's when she'll hand down her decision. In case Musk is found in contempt, he might be required to start submitting regular reports about how Tesla's lawyers are overseeing his tweets. SEC lawyer Cheryl Crumpton is also eyeing the possibility of imposing higher fines, seeing as Musk said the $20 million fine he had to pay the first time was "worth it."
Tesla chief Elon Musk told reporters outside the Manhattan Federal Courthouse that he was "very happy" over the outcome of the SEC's latest complaint against him. The commission sought to hold him in contempt for violating their previous settlement over a financially relevant tweet, after all, but the judge has merely ordered both parties to resolve their dispute outside of court. "Take a deep breath, put your reasonableness pants on, and work this out," District Judge Alison Nathan said during the hearing.
The SEC brought him to court for the second time after he tweeted a photo of Tesla's facility and followed that up by saying that the automaker will manufacture 500,000 cars in 2019. He corrected himself in another follow-up and clarified that 500,000 is merely the expected production rate. Tesla still expects to deliver 400,000 vehicles for the year, which is consistent with previous guidance. Clearly, his clarification wasn't enough for the SEC.
Tesla made 0 cars in 2011, but will make around 500k in 2019
Musk had to step down as Tesla chairman and pay $20 million in penalty the first time the Securities and Exchange Commission filed a lawsuit against him over tweets about taking Tesla private. The agency said his proclamation that the company already has the funding to take the automaker private constitutes fraud for being "false and misleading."
While that lawsuit also sought to ban the executive from serving as an officer of a public company, Musk's deal with the SEC ultimately allowed him to keep his role as Tesla's CEO. Also part of that deal? Having tweets that contain material information about Tesla's vehicle production pre-approved by one of the company's lawyers.
The commission said that by tweeting the 500,000 production outlook for the year, Musk shared "inaccurate and material" data, one that wasn't reviewed by Tesla's lawyers. Musk argued, however, that he had the right to decide whether a post needs pre-approval and that the tweet in question was immaterial to shareholders. He said in a statement provided to Reuters:
"I have great respect for Judge Nathan, and I'm pleased with her decision today. The tweet in question was true, immaterial to shareholders, and in no way a violation of my agreement."
Judge Nathan gave both parties two weeks to hammer out an agreement. If they still don't reach one by that time, then that's when she'll hand down her decision. In case Musk is found in contempt, he might be required to start submitting regular reports about how Tesla's lawyers are overseeing his tweets. SEC lawyer Cheryl Crumpton is also eyeing the possibility of imposing higher fines, seeing as Musk said the $20 million fine he had to pay the first time was "worth it."
South Korea and the US have this week launched the world's first commercial 5G services, promising a new wave of capabilities for smartphone users.
Samsung said its Galaxy S10 5G device will offer speeds up to 20 times faster than current phones as it began selling the handsets on Friday.
Countries are racing to build 5G networks that will be crucial for future tech such as driverless cars.
Nations are also working to resolve security concerns tied to the networks.
What is 5G?
5G is the fifth-generation of mobile internet connectivity. Users will get more data faster, with less delay. It also promises wider coverage and more stable connections.
Ed Barton, chief television and entertainment analyst at Ovum, said the shift from today's 4G networks to 5G will be significant.
He said first-generation or 1G networks enabled voice, 2G brought text, 3G static images or photos, and 4G enabled video.
"We're expecting the leap from 4G to 5G to be a much greater leap than ever before."
Part of the "leap" will come from the ability to move much greater volumes of data across networks. 5G will mean more devices can be connected to the network at better speeds.
Initially, 5G will bring higher-quality streaming and the ability to livestream to bigger audiences - a better experience for people watching live sports or cloud gaming.
Ovum's Mr Barton said down the track it will enable more augmented reality capabilities, such as better mapping apps and shopping experiences. 5G will be crucial for driverless cars.
The scope of possibilities is vast, from remote surgery to holographic video calls. Mr Barton said we don't yet know what the "killer apps and use cases will be".
"It's a bit like no one predicted that ubiquitous smartphones with payments and location awareness would give rise to Uber," he said.
DJ Koh, president of IT & mobile communications at Samsung Electronics said it has begun "a new era where the incredible speed and connectivity of 5G becomes a reality".
Frost & Sullivan telecoms analyst Quah Mei Lee says South Korea and Japan have been leaders in 5G development. She said South Korea has always been strong in consumer applications but there's "more than it can do" in 5G.
"We will see more applications coming to the market over the next three-to-six months."
What about security concerns?
Much discussion about 5G infrastructure has centred around possible security risks, namely the participation of China's Huawei.
Huawei, the world's largest maker of telecoms equipment, has faced resistance from foreign governments over the risk that its technology could be used for espionage.
In principle, controlling the technology that sits at the heart of vital communications networks gives an operator like Huawei the capacity to conduct espionage or disrupt communications.
This becomes a bigger problem as more things - from autonomous vehicles to domestic appliances - become connected to the internet.
Additionally, IDC's Mr Batra said one of the fundamental differences between 4G and 5G networks is the ability for remote control which raises "potential security concerns".
Mr Batra said with 4G, software and hardware were very tightly coupled. In 5G networks, hardware is separated from the software.
"That allows for remote control... of the network assets. All of these things can be managed virtually, and that makes it challenging in terms of security."
Still, he said authorities around the world are working with operators to address these concerns and "we haven't really seen any hard proof in terms of what is the issue".
Tesla, Elon Musk and the U.S. Securities and Exchange Commission have two weeks to work out their differences and come to a new resolution, a U.S. judge said Thursday at the conclusion of a hearing held to determine whether the automaker’s CEO should be held in contempt for his Twitter use.
The SEC had asked the court to hold Musk in contempt for violating a settlement agreement reached last October over Musk’s now infamous “funding secured” tweet. Under that agreement, Musk is supposed to get approval from Tesla’s board before communicating potentially material information to investors, the agency has argued. The SEC says a February 19 tweet violated the agreement.
Musk contends he didn’t violate the agreement and that the problem lies in the SEC’s interpretation, which he described as “virtually wrong at every level,” in a recent court filing.
As lawyers from Tesla and the SEC argued their points Thursday, U.S. District Judge Alison Nathan’s questioning suggested little patience with the two parties’ inability to reach a resolution, according to TechCrunch’s review of several reported accounts of inside the courtroom, including from Bloomberg and Courthouse News.
Nathan says that she has "serious concerns" that her ruling won't resolve the controversy.
"My call to action is for everyone to take a deep breath, put your reasonableness pants on and work this out."
Musk told reporters after the hearing that he was “very impressed” with Nathan’s analysis and later when asked whether he would be able to work out problems with the SEC, he replied “Most likely,” Bloomberg reported.
The concerns about the outcome of the hearing, which some worried would result in Musk losing his CEO position, along with disappointing delivery numbers in the first quarter put pressure on Tesla’s share price. Tesla shares fell more than 8 percent to close at $267.78 on Thursday.
The increasingly expensive scuttlebutt between Musk and the SEC began in August when the CEO tweeted that he had “funding secured” for a private takeover of the company at $420 per share. The SEC filed a complaint in federal district court in September alleging that Musk lied.
Musk and Tesla settled with the SEC without admitting wrongdoing and Tesla agreed to pay a $20 million fine; Musk had to agree to step down as Tesla chairman for a period of at least three years; the company had to appoint two independent directors to the board; and Tesla was also told to put in place a way to monitor Musk’s statements to the public about the company, including via Twitter.
However, the relationship between Musk and the SEC has remained strained. Musk has openly criticized the SEC via Twitter on various occasions, openly mocking the agency at times, even days after the settlement was reached:
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
In February, the SEC escalated matters and asked a judge to hold Musk in contempt for violating the settlement agreement. Musk tweeted February 19 that Tesla would produce “around” 500,000 cars this year, correcting himself hours later to clarify that he meant the company would be producing at an annualized rate of 500,000 vehicles by year-end.
The SEC accuses Musk of violating a settlement deal reached last year that required he get pre-approval for social media posts about the electric car company.
Musk's appearance at the Manhattan court surprised onlookers. Judge Alison Nathan is tasked with weighing the SEC's request to hold Musk in contempt. It is unclear when Nathan will issue a ruling.
If she sides with regulators, Musk could face another hefty fine and further limits to his social media use. The judge could oust Musk from the CEO seat, although she is not expected to rule that harshly. Nathan could also toss out the settlement with the SEC, effectively reopening the agency's litigation against Musk and Tesla.
The SEC claims Musk violated its 2018 settlement deal when he said in a February 19 tweet that Tesla will make around 500,000 cars in 2019. Hours later, he posted another tweet that said the company will actually deliver 400,000 cars this year.
Although Musk corrected the mistake, regulators said he had "once again published inaccurate and material information about Tesla to his over 24 million Twitter followers," according to court papers. Musk has denied wrongdoing and accused the SEC of trying to stifle free speech.
Tesla had agreed to establish a board committee to oversee Musk's posts. In a court filing, Tesla conceded Musk did not receive pre-approval from anyone on that committee for his February posts, but the company has since claimed that he didn't need it.
Musk's standoff with the SEC started last year when he claimed in a tweet that he was "considering" taking Tesla private at $420 a share and that he had secured funding for the deal. That sent Tesla's stock surging.
But the SEC later said funding was not, in fact, secured, and the agency accused him in a lawsuit of misleading investors. Musk initially signaled that he would fight the agency, but weeks later regulators announced that he and Tesla had agreed to settlement deals that saddled them with $40 million in fines and required Musk to step down as the company's chairman. He retained the role of CEO.
Since that deal was reached in October, Musk has openly mocked the SEC, suggested its oversight is "broken" and said he does "not respect " the agency.
Musk also said in a December interview with "60 Minutes" that he would not allow all of his tweets to be proofread, though he insisted that he planned to comply with the settlement terms out of "respect" for the "justice system."
After he posted the erroneous tweet in February, the SEC hit back by filing a new suit asking a federal judge to hold him in contempt. The agency claimed Musk had not "made a diligent or good faith effort" to comply with the settlement and pointed to his "60 Minutes" interview as evidence he was not taking the terms seriously.
The escalating situation, and other erratic behavior by Musk, left many investors wondering what it would mean for Tesla if its famous CEO was ousted from the company. A Barclays analyst suggested Tesla's stock has a $130 "Musk premium," which could disappear if he leaves.
Elliot Lutzker, a securities attorney at Davidoff Hutcher & Citron LLP and a former SEC prosecutor, said on Thursday he thinks the court will consider Tesla's wellbeing in deciding if or how to punish Musk.
"The court does not want to hurt Tesla shareholders," Lutzker told CNN Business in an email on Thursday. "I do not believe the court will hold him in contempt. Rather it will in all likelihood impose more substantial fines."
MacKenzie Bezos announced on Twitter on Thursday that she and Jeff Bezos have completed the process of dissolving their marriage, leaving her with $35.6 billion in Amazon stock.
MacKenzie Bezos said she was "happy" to be giving her ex-husband 75 percent of their stock in Amazon along with voting control of her shares. She also relinquished to him all of her interests in The Washington Post and the Blue Origin aerospace company.
The settlement would make her the fourth-richest woman in the world. She ranks behind Francoise Bettencourt Meyers, Alice Walton and Jacqueline Mars, according to Bloomberg.
According to a filing with the Securities and Exchange Commission, MacKenzie Bezos will retain shares representing about 4 percent of Amazon's outstanding common stock, making her the third-biggest shareholder at the company, behind her ex-husband and Vanguard. He remains the richest person in the world, even after losing $35.6 billion in Amazon stock.
Amazon's stock was down about 0.4% Thursday afternoon following the news.
In a separate statement, Jeff Bezos shared his gratitude to his ex-wife.
"I'm grateful for her support and for her kindness in this process and am very much looking forward to our new relationship as friends and co-parents," Bezos said.
The announcement clears up some concerns investors had in the days after the couple announced their plans to get a divorce about who would have voting power at Amazon. The Bezoses' split represented a unique situation, according to divorce law experts, since the two were together before Amazon started and before either of them owned such a vast amount of money.
While other founders and CEOs have gotten divorces, most had met their spouses after acquiring their wealth. MacKenzie Bezos, on the other hand, reportedly played a significant role laying Amazon's roots. In an oft-cited origin story, MacKenzie drove the pair from New York to Seattle while Jeff wrote Amazon's business plan. MacKenzie eventually negotiated Amazon's first freight contracts, according to Wired.
