Samsung’s operating profit misses market estimate due to falling smartphone sales
[THE INVESTOR] Samsung Electronics announced its earnings guidance for the second quarter on July 6.
The company raked in 14.8 trillion won (US$13.2 billion) in operating profit, up 5.19 percent from the same period last year with its revenue standing at 58 trillion won, down by 4.92 percent on-year. The operating profit missed the previous market consensus of 15.27 trillion won.
From the previous quarter, the operating income dropped by 5.37 percent, ending the upward trend where Samsung had posted record operating profits quarter after quarter since the second quarter last year.
The tech firm’s cash cow smartphone business is said to have performed under par due to the saturated smartphone market while the chip business fared quite well despite price fluctuations of semiconductors, including DRAM.
Market analysts estimated the company’s mobile division earned 2.3 trillion won in the second quarter, down from 4.06 trillion won from a year prior.
They anticipated that Samsung Galaxy S9’s sales were more disappointing than expected.
“The S9 sales in the second quarter will likely stand at 8 million (units), and the annual sales will come in at 28 million. The disappointing figures for the high-end phones are the main reason behind the firm’s lower-than-expected smartphone sales” said Doh Hyun-woo, an analyst from NH Investment & Securities
The chip business is anticipated to have earned some 12 trillion won while the consumer electronics division is expected to have raked in 400 billion won, up 40 percent quarter-on-quarter due to seasonal factors.
After the preliminary earnings announcement, the shares dropped to a low of 44,650 won in early morning trade. The stock closed down 2.29 percent at 44,900 won.
By Kim Young–won (firstname.lastname@example.org)