Menu
Samsung profit growth slows in second quarter

Samsung profit growth slows in second quarter

The chip business continued to perform well

Credit: Reuters Kim Hong-Ji

Samsung Electronics has posted its slowest quarterly profit growth in more than a year as the sluggish global smartphone market weighed on earnings, although the chip business continued to perform well.

Operating profit for the world's biggest chipmaker and smartphone maker rose 5.7 per cent to 14.9 trillion won (US$13.3 billion) in the second quarter, Samsung said in a regulatory filing, compared with 14.8 trillion won it had estimated.

The Apple components supplier and smartphone rival said operating profit from the mobile business sank 34 per cent from a year ago, and warned of stiffer competition in the second half due to the release of new models.

The South Korean tech giant added however that demand for memory chips, its biggest earnings contributor by far, would remain strong in the second half thanks to the growth of server data centres.

Revenue for the April-June period fell 4 per cent to 58.5 trillion won, broadly in line with Samsung's earlier estimate.

Like other big electronics firms, Samsung faces challenges from the US-China trade war, falling prices of some memory chips and the rise of cheap Chinese-made handsets.

Samsung's difficulties in the mobile market, which accounts for about 40 per cent of its revenue, have been exacerbated by its recent lack of innovation to drive sales of its premium Galaxy series gadgets.

The mobile business booked 2.7 trillion won in quarterly operating profit.

Data released by market tracker Counterpoint Research in July showed Samsung's latest Galaxy 9 Plus premium handset had been overtaken by Apple's iPhone 8 as the world's top-selling smartphone.

Competition from cheaper Chinese brands like Xiaomi and Huawei have already seen Samsung lose market share in China and India, the world's top smartphone markets.

Samsung regained its lead in India's smartphone market in the second quarter thanks to solid sales in its budget segment according to Counterpoint Research.

While the mobile business struggles, the chip business remained Samsung's top earner in the second quarter as sales to the cloud-computing and crypto-currency industries propped up DRAM chip prices even as NAND flash memory prices slipped.

Samsung's chip unit posted a record 11.6 trillion won operating profit, up 45 per cent from a year ago. Samsung shares were down 0.5 per cent in early trading, compared with 0.2 percent drop in the broader market.

(Reporting by Ju-min Park and Heekyong Yang; Editing by Stephen Coates)


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags samsung

Featured

Slideshows

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

EDGE 2018: Kiwis kick back with Super Rugby before NZ session

New Zealanders kick-started EDGE 2018 with a bout of Super Rugby before a dedicated New Zealand session, in front of more than 50 partners, vendors and distributors on Hamilton Island.​

EDGE 2018: Kiwis kick back with Super Rugby before NZ session
EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018: Kiwis assess key customer priorities through NZ research

EDGE 2018 kicked off with a dedicated New Zealand track, highlighting the key customer priorities across the local market, in association with Dell EMC. Delivered through EDGE Research - leveraging Kiwi data through Tech Research Asia - more than 50 partners, vendors and distributors combined during an interactive session to assess the changing spending patterns of the end-user and the subsequent impact to the channel.

EDGE 2018: Kiwis assess key customer priorities through NZ research
Show Comments