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Samsung expects another steep decline in fourth-quarter profit

Operating profit is expected to drop 34% for the quarter, on top of a 29% decline in the year-ago quarter.

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Samsung warned in the third quarter that smartphone sales would soften in the fourth quarter.

James Martin/CNET

The slowdown in tech appears to still be weighing on Samsung and its profits. The Korean electronics giant said Tuesday that it expects to report another steep decline in fourth-quarter profit, the second time it's done so in two years.

The company said it expects to record an operating profit for the three-month period ended Dec. 31 of about 7.1 trillion won ($6 billion), a year-over-year decline of 34%. A year ago, Samsung reported a 29% drop in its operating profit.

Samsung is best known as a phone and TV maker, but it also sells more memory chips than any other company on the planet. In 2017, Samsung became the world's biggest semiconductor maker in terms of revenue, beating out the long-term leader Intel.

The company's bottom line has been battered in recent months by ongoing weakness in the chip industry and general weakness in the smartphone market, which has suffered from rising phone prices and consumers upgrading less often. Samsung largely bucked the smartphone malaise in the third quarter on strong sales of its Galaxy Note 10 and A-series phones. But it warned in October that it expected smartphone shipments to decline in the fourth quarter year-over-year as flagship sales weaken after postlaunch highs.

The company also expects to record revenue of 59 trillion won ($50.5 billion), about the same as its year-ago period. The earnings guidance, released Tuesday ahead of full earnings later this month, didn't provide specific divisional results.