Published: Thu, August 02, 2018
Tech | By Tabitha Holland

Samsung Electronics posts $9.9 bn Q2 net profit, down 0.1%

Samsung Electronics posts $9.9 bn Q2 net profit, down 0.1%

Samsung's second-quarter earnings report reveals its operating profit fell nearly 5 percent, to 14.9 trillion won ($13.3 billion), with revenue down 3 percent, to 58.5 trillion won. However, considering the Korean manufacturer does not make as much money as Apple does on iPhone sales, the remainder of that profit is going to be contributed thanks to AMOLED screens, DRAM chips, flash memory and semiconductor sales.

The company posted KRW14.87 trillion in quarterly operating profit, up 6 percent.

Samsung Galaxy Tab S4 doubles as a portable notebook. Image Cho Mu-Hyun
Samsung Galaxy Tab S4 doubles as a portable notebook. Image Cho Mu-Hyun

"Second quarter revenue fell due to softer sales of smartphones and display panels", Samsung said in a statement. Following two glowing quarters, Q2 2018 was relatively cool, with sales and profits falling compared to both last quarter and Q2 2017.

The local currency's weakness to its major peers, except the greenback, negatively influenced a net 400 billion won (358 million US dollars) worth of operating profit compared with the prior quarter.

While Samsung's profit growth may have slowed, the company's chip sales have been stellar. The Korean won weakened against the USA dollar but rose against the euro and several other key currencies, resulting in a negative impact of net KRW400 billion on the quarterly operating profit compared with the previous quarter. Profits and revenues fell 65.9% and 24.8%, respectively, on quarter.

Samsung said it also made a decision to hand out dividends of 354 won per shares, with the combined amount of 2.4 trillion won. While the company doesn't reveal the actual price of the smartphone, a recent report claimed that the 128GB storage variant of the Note 9 model will come with a price tag of IDR 13,500,000 (approx Rs 64,400). Mobile accounts for around 40 per cent of its total revenue. Samsung previously posted seven successive quarters of profit growth, fueled by high demand and prices within its lucrative memory chip business.

As for the short term, Samsung said that competition would be greater during the second six months of 2018, as new models of smartphones are released, prompting it to launch its new Galaxy Note at an earlier time than normal. The memory business achieved strong results despite weak seasonality, as overall demand growth was solid, driven by servers for data centers.

Samsung said the system LSI and foundry businesses would benefit from higher demand for mobile Aps and image sensors, noting that flexible OLED shipments would rise despite the intensifying competition.

The world's biggest maker of memory chips and the flagship subsidiary of South Korea's Samsung group, the company has weathered a series of setbacks, including an embarrassing global recall of its Galaxy Note 7 smartphone due to exploding batteries in 2016.

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