Samsung’s profit cut in half on slow sales of memory and flagship phones

Samsung Electronics has published second-quarter earnings results in line with its previous guidance, which means that they are not excellent. Operating profits fell 56 percent year-on-year to 6.6 billion won, the lowest since the company had to deal with the fire risk consequences of the 2016 Galaxy Note 7, while revenue fell 4 percent to 56.13 trillion won.

Samsung attributes its problems largely to weak market conditions for its important semiconductor business, despite a slight increase in memory demand. The situation is expected to improve somewhat in the second half of the year, although Samsung warns of "external uncertainties," probably a reference to the implications of several international trade disputes.

While revenues increased 8 percent in Samsung's mobile division, earnings fell 42 percent year-on-year. Samsung says that general phone shipments increased, with strong sales of mid-range models such as the Galaxy A50 and A70, but the flagship (and more profitable) Galaxy S10 experienced a "weak sales boost" during the quarter.

Samsung looks forward to the next Galaxy Fold and Galaxy Note 10 releases will help its premium smartphone sales, and the company also plans to launch "more competitive A-series models" in the second half of this year. Meanwhile, the display business is expected to improve its performance with higher shipments of OLED displays, and Samsung believes that phone manufacturers will opt for thinner panels to mitigate the design limitations of 5G devices.

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