More Electronics Firms Announcing Weak Results

Wall Street

from the rolling-on dept

On Monday, chip maker AMD gave a dire earnings warning amidst a slump in chip sales and a price war with rival Intel. That news was followed up the next day by a warning from hard drive maker Seagate that its earnings would disappoint as well, again due to weak volume and poor pricing power. Today, Samsung, one of the world’s largest and most diversified electronics companies, released earnings that were sharply down from last year due to pricing slump. There were a few bright spots for the company, as sales of high definition TVs managed to hold up, while handset volume hit a new quarterly record. Still, it’s clear that the company is not firing on all cylinders as it had been over the last few years. Commenting on the report, analysts noted that the company failed to cut costs to make up for weakening sales, which suggests that the downturn may have come a lot faster than the company was anticipating. The same could probably be said about AMD and Seagate. Meanwhile, other recent high flyers such as Research in Motion also spooked investors with word of weak results. It may be too early to jump to conclusions about the broader tech sector, but it would be a mistake to dismiss all of these as isolated cases and ignore them.