Slumping Galaxy sales lead to weak Samsung earnings
- Author: Arturo Norris Aug 02, 2018,
Aug 02, 2018, 23:47
Sales fell dropped 58.48 trillion won from 60.56 trillion won in the first quarter and 61 trillion won in the second quarter a year ago.
In an industry known for its earnings-report doublespeak, Samsung's straightforward acknowledgment that its device sales are falling behind is refreshing. Profits and revenues for the quarter represented sequential decreases of 29.2% and 15.6%, respectively.
One area of interest that showed positive growth for Samsung was its TV business, which the company credited "a major global soccer event" for the boost in sales.
Operating profit for the world's biggest chipmaker and smartphone maker rose 5.7 percent to 14.9 trillion won in the second quarter. The memory business achieved strong results despite weak seasonality, as overall demand growth was solid, driven by servers for data centers.
Huawei Technologies in China, the third largest maker of smartphones in the world, said earlier Tuesday that it experienced its slowest growth in sales for the first six months of 2018, since 2013. It can also be used to navigate, translate and organize notes through Samsung Notes, and even send personalized texts through Samsung Live Message. The latest device from Samsung to get a price cut is Galaxy J6.
Samsung's smartphone shipments and sales declined quarter-on-quarter amid the sluggish premium smartphone market, leading to the fall in sales and operating profit.
Samsung revealed that its smartphone division has gained 2.7 trillion won in Operating Profit, down from 4.1 trillion won gained previous year.
The company's first foldable smartphone - now dubbed the Galaxy X - is also tipped to breathe new life. The phone was launched in 2016 and almost around fifty million units were shipped.
The smartphone market is overly saturated. Pre-orders start today on Samsung.com until August 9, 2018.
A "reasonable" price means different things to different people. Smartphones accounted for 90 percent of its handset sales, it added.
Samsung is scheduled to launch a new Note series early next month.
As they say, the phone is likely to have the same chipset as the S9+ but it feels like that was already a given. "Looking ahead, Samsung expects sustained strength in the memory market and growing demand for flexible OLED panels to drive earnings higher in the second half".
Samsung then said it is preparing the release of micro LED TVs customized for businesses and households, respectively.
The company spent 8 trillion won (7.2 billion US dollars) in capital expenditure in the second quarter, including 6.1 trillion won (5.5 billion USA dollars) for the chip business and 1.1 trillion won (984 million USA dollars) for the display panel division.
Samsung will also reportedly release a 512GB version that will cost 1,353,000 won (around $1,201). Revenue was also down 20 percent year on year to 24 trillion won.
Samsung shares slid 0.5 percent by 0254 GMT, compared with 0.1 percent drop in the broader market.