Samsung Electronics expects its second quarter operating profit to be reduced by more than half from the previous year, dropping around 56 percent to 6.5 trillion won ($ 5.56 billion) , according to the earnings guide published today by the company. It is projected that revenues will slide approximately 4 percent to 56 trillion won ($ 47.89 billion).
This would be Samsung's lowest profit since the third quarter of 2016, when the company was affected by the Galaxy Note 7 debacle. Samsung does not provide full explanations along with its profit guide, but analysts suggest that the Huawei's crackdown could have had a significant impact on Samsung's critical chip business. On the other hand, it is also likely to help Samsung's smartphone sales in certain markets.
Things could have been even worse for Samsung this quarter if it had not benefited from a single profit in the screen division that increased profits. According to analysts who spoke with Reuters, Samsung received a refund of approximately 800 billion won ($ 684 million) from Apple because the US company, which uses Samsung's OLED displays on its iPhones, did not reach a target of Sales agreed.