Skip to main content
https://www.highperformancecpmgate.com/rgeesizw1?key=a9d7b2ab045c91688419e8e18a006621

Samsung posts 55.6% drop in second-quarter profit as it copes with weak demand and a trade dispute

As it forecast earlier this month, Samsung reported a steep drop in its second-quarter earnings due to lower market demand for chips and smartphones. The company said its second-quarter operating profit fell 55.6% year-over-year to 6.6 trillion won (about $5.6 billion), on consolidated revenue of 56.13 trillion won, slightly above the guidance it issued three weeks ago.

Last quarter, Samsung also reported that its operating profit had dropped by more than half. The same issues that hit its earnings during the first quarter of this year have continued, including lower memory prices as major datacenter customers adjust their inventory, meaning they are currently buying less chips (the weak market also impacted competing semiconductor maker SK Hynix’s quarterly earnings).

Samsung reported that its chip business saw second-quarter operating profit drop 71% year-over-year to 3.4 trillion won, on consolidated revenue of 16.09 trillion won. In the second half of the year, the company expects to continue dealing with market uncertainty, but says demand for chips will increase “on strong seasonality and adoption of higher-density products.”

Meanwhile, Samsung’s mobile business reported a 42% drop in operating profit from a year ago to 1.56 trillion won, on 25.86 trillion won in consolidated revenue. The company said its smartphone shipments increased quarter-over-quarter thanks to strong sales of its budget Galaxy A series. But sales of flagship models fell, due to “weak sales momentum for the Galaxy S10 and stagnant demand for premium products.”

Samsung expects the mobile market to remain lackluster, but it will continue adding to both its flagship and mass-market lineups. It is expected to unveil the Note 10 next month and a new release date for the delayed Galaxy Fold, along with new A series models in the second half of the year.

“The company will promptly respond to the changing business environment, and step up efforts to secure profitability by enhancing efficiency across development, manufacturing and marketing operations,” Samsung said in its earnings release.

It’s not just market demand that’s impacting Samsung’s earnings. Along with other tech companies, Samsung is steeling itself for the long-term impact of a trade dispute between Japan and South Korea. Last month, Japan announced that it is placing export restrictions on some materials used in chips and smartphones. Samsung said it still has stores of those materials, but it is also looking for alternatives since it is unclear how long the dispute between the two countries may last (and it could last for a long time).

Comments

Post a Comment

Popular posts from this blog

Uber co-founder Garrett Camp steps back from board director role

Uber co-founder Garrett Camp is relinquishing his role as a board director and switching to board observer — where he says he’ll focus on product strategy for the ride hailing giant. Camp made the announcement in a short Medium post in which he writes of his decade at Uber: “I’ve learned a lot, and realized that I’m most helpful when focused on product strategy & design, and this is where I’d like to focus going forward.” “I will continue to work with Dara [Khosrowshahi, Uber CEO] and the product and technology leadership teams to brainstorm new ideas, iterate on plans and designs, and continue to innovate at scale,” he adds. “We have a strong and diverse team in place, and I’m confident everyone will navigate well during these turbulent times.” The Canadian billionaire entrepreneur signs off by saying he’s looking forward to helping Uber “brainstorm the next big idea”. Camp hasn’t been short of ideas over his career in tech. He’s the co-founder of the web 2.0 recommendatio...
Post a Comment
Read more

Leading VCs discuss how COVID-19 has impacted the world of digital health

In December 2019, Extra Crunch spoke to a group of investors leading the charge in health tech to discuss where they saw the most opportunity in the space leading into 2020 . At the time, respondents highlighted startups in digital therapeutics, telehealth and mental health that were improving medical practitioner efficiency or streamlining the distribution of care, amongst a variety of other digital health markets that were garnering the most attention. Where top VCs are investing in digital health In the months since, the COVID-19 crisis has debilitated national healthcare systems and the global economy. Weaknesses in healthcare systems have become clearer than ever, while startups and capital providers have struggled to operate while wide swaths of the market effectively shut down. Given significant volatility and the rapid changes seen in the worlds of healthcare, venture and startups broadly, we wanted to understand which inefficiencies might have been brought to light, w...
Post a Comment
Read more

News-reading app Flipboard expands local coverage, including coronavirus updates, to 12 more U.S. metros

Earlier this year, personalized news aggregation app Flipboard expanded into local news . The feature brought local news, sports, real estate, weather, transportation news and more to 23 cities across the U.S. Today, Flipboard is bringing local news to 12 more U.S. metros and is adding critical coronavirus local coverage to all of the 35 supported locales. The 12 new metros include the following:  Baltimore, Charlotte, Cleveland, Detroit, Indianapolis, Nashville, Pittsburgh, Orlando, Raleigh, Salt Lake City, St. Louis, and Tampa Bay. They join the 23 cities that were already supported:  Atlanta, Austin, Boston, Chicago, Dallas, Denver, Houston, Las Vegas, Los Angeles, Miami, Minneapolis-St. Paul, New Orleans, New York City, Philadelphia, Phoenix, Portland, Sacramento, San Diego, San Francisco Bay Area, Seattle, Toronto, Vancouver and Washington, D.C. To offer local news in its app, Flipboard works with area partners, big and small, like The Plain Dealer’s Cleveland.com , ...
Post a Comment
Read more