Samsung Electronics profit dips as phone sales fall

Samsung Electronics said yesterday its second-quarter net profit dipped slightly from a year earlier, with a fall in smartphone sales mitigated by strong demand for its memory chips, reports AFP from Seoul.

A sluggish market for premium mobile phones and stiff competition contributed to a decline in Samsung’s smartphone shipments and revenue compared to the previous quarter, denting demand for its flagship Galaxy device, the South Korean company said.

Samsung, the world’s biggest maker of memory chips, has weathered a series of setbacks, including an embarrassing global recall of its Galaxy Note 7 due to exploding batteries in 2016.

Adding to its troubles, its vice-chairman Lee Jae-yong, scion of the founding family, was jailed last year for his part in the corruption scandal that brought down former president Park Geun-hye.

Lee has since been released after some of his convictions were quashed on appeal, and the company has posted record profits in recent quarters, until now.

Net profit for April-June was 11.04 trillion won ($9.9 billion), the company said in a regulatory filing—slightly lower than the 11.05 trillion won in the same period in 2017, and missing the 11.6 trillion won average of estimates compiled by Bloomberg News.

While total sales fell 4.1 percent year-on-year to 58.48 trillion won, the company’s mobile division was particularly hard hit, with revenues plunging 22 percent in the same period.

“Second-quarter revenue fell due to softer sales of smartphones and display panels,” Samsung said in a statement.

Weak sales of its flagship smartphone, the Galaxy S9, drove down earnings but robust demand for premium TVs—thanks to soaring interest in the World Cup—and memory chips helped boost operating profit nearly six percent.

Samsung’s chipmaking unit, which dominates the global market, provides chips for the company’s own devices as well as those of competitors including Apple.

Although its semiconductor business was a bright spot, achieving record operating profits of 11.6 trillion won, the earnings were lower than expected—with market forecasts averaging 12 trillion won.

 

Samsung Electronics profit dips as phone sales fall

Samsung Electronics said yesterday its second-quarter net profit dipped slightly from a year earlier, with a fall in smartphone sales mitigated by strong demand for its memory chips, reports AFP from Seoul. A sluggish market for premium mobile phones and stiff competition contributed to a decline in Samsungs smartphone shipments and revenue compared to the previous quarter, denting demand for its flagship Galaxy device, the South Korean company said. Samsung, the worlds biggest maker of memory chips, has weathered a series of setbacks, including an embarrassing global recall of its Galaxy Note 7 due to exploding batteries in 2016. Adding to its troubles, its vice-chairman Lee Jae-yong, scion of the founding family, was jailed last year for his part in the corruption scandal that brought down former president Park Geun-hye. Lee has since been released after some of his convictions were quashed on appeal, and the company has posted record profits in recent quarters, until now. Net profit for April-June was 11.04 trillion won ($9.9 billion), the company said in a regulatory filingslightly lower than the 11.05 trillion won in the same period in 2017, and missing the 11.6 trillion won average of estimates compiled by Bloomberg News. While total sales fell 4.1 percent year-on-year to 58.48 trillion won, the companys mobile division was particularly hard hit, with revenues plunging 22 percent in the same period. Second-quarter revenue fell due to softer sales of smartphones and display panels, Samsung said in a statement. Weak sales of its flagship smartphone, the Galaxy S9, drove down earnings but robust demand for premium TVsthanks to soaring interest in the World Cupand memory chips helped boost operating profit nearly six percent. Samsungs chipmaking unit, which dominates the global market, provides chips for the companys own devices as well as those of competitors including Apple. Although its semiconductor business was a bright spot, achieving record operating profits of 11.6 trillion won, the earnings were lower than expectedwith market forecasts averaging 12 trillion won.