Samsung Electronics Co yesterday reported a lower-than-expected gain in second-quarter earnings, indicating an end to its streak of record-breaking financial results as sales of smartphones and display panels slowed while memorychip profit stabilized.
The South Korean tech giant said its second-quarter net income stood at 10.98 trillion won (US$9.8 billion), up 2 percent from 10.80 trillion won a year earlier.
The result fell short of the analyst consensus of 11.14 trillion won, financial data provider FactSet said.
Photo: AFP
Sales fell 4 percent to 58.48 trillion won, while operating income advanced 6 percent to 14.87 trillion won, in line with its earnings preview earlier last month.
The latest results indicate an end to Samsung’s streak of record-breaking financial results that stunned investors. Samsung, the world’s largest maker of memory chips, smartphones and display panels, reported explosive profit growth last year, driven by an unprecedented boom in memory chip business.
The profit growth in the memory chip business began to stabilize this year, but it is still the lion’s share of the firm’s bottom line.
During the second quarter, Samsung’s semiconductor business generated 11.61 trillion won in operating profit, nearly 80 percent of the entire operating income.
On the other hand, Samsung’s handset business reported a big fall in quarterly profit from a year earlier. Sales of Galaxy S9 and other flagship smartphones declined, while it had to spend more marketing expenses to promote smartphones. Its phone business reported 2.67 trillion won in operating income during the three-month period, compared with 4.06 trillion won a year earlier.
Samsung gave an upbeat forecast on the semiconductor industry, echoing the rosy view of other memory chipmakers, but it expected challenges in the mobile business going forward.
“The outlook for the memory chip business remains strong across all applications thanks to demand for server and PC memory, as well as new mobile product launches,” Samsung said in a statement. “The mobile market condition will likely remain challenging in the second half of the year amid pricing competition and new product launches.”
Samsung is due to announce the latest iteration of the Galaxy Note smartphone next week, which it said would hit shelves sooner than previous years.
The company said the new Note smartphone, which has often been the most expensive phone model from Samsung, would be sold for “a reasonable price” this time.
Costly high-end smartphones have increasingly lost luster in the past few years, because older phone models demonstrate decent performance for most consumers.
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