05 August 2019
Samsung has announced its financial results for the second quarter ended June 30, 2019. The company recorded 56.13 trillion won ($47.4 billion) in consolidated sales and 6.6 trillion won ($5.58 billion) in operating profit in quarterly operating profit. According to what it has posted in its Q2 earnings report, the quarterly sales and operating profit decreased 4 percent and 56 percent from Q2 2018. The overall decline is affected due to the sluggish performance of its two main divisions – memory chip and smartphones.
While revenue was up 8 percent at Samsung’s mobile division, profit was down 42 percent year on year.
“The weakness and price decline in the memory chip market persisted as effects of inventory adjustments by major data center customers in the previous quarters continued, despite a limited recovery in demand,” a company official said during a conference call.
According to Samsung, the overall phone shipments increased, with strong sales for mid-range models like the Galaxy A50 and A70. But due to the weak sales momentum of the premium phone Galaxy S10, the company encountered a loss.
In the third quarter, Samsung hopes that the Galaxy Note 10 and the Galaxy Fold will help its premium smartphone sales. The company also plans to release “more competitive A-series models” in the second half of this year.
In digital appliances space, the profits grew significantly YoY, thanks to improvements in the profitability of key appliances like refrigerators and washing machines. Samsung also believes the network business will continue to solidify as it solidifies its position in the global 5G market.
Samsung foresees the second half of this year and postulates that it expects persistent uncertainties in the memory business, although demand is going to increase. Higher demand in mobile APs, image sensors and display driver ICs (DDIs) is also expected to be seen.