Samsung Electronics reports lower-than-expected profit

The South Korean tech giant said its second-quarter net income stood at 10.98 trillion won (US$9.8 billion), up 2 percent from 10.80 trillion won a year earlier.

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Operating profit came to 14.87 trillion won, up 5.71 percent from the previous year.

Quarterly revenue declined 4.13 percent to 58.48 trillion won from a year earlier. Most of the credit for this rise can be given to the company’s mid-range smartphones, the Galaxy J6 and Galaxy J8 that have been performing good in terms of sales, a Counterpoint research report said. Bucking the trend, the semiconductor sector posted record highs in both revenue and operating profit.

The consolidated net profit was 11.04 trillion won ($9.85 billion).

The world’s biggest maker of memory chips, Samsung has weathered a series of setbacks, including an embarrassing global recall of its Galaxy Note 7 smartphone due to exploding batteries in 2016. The memory business achieved strong results despite weak seasonality, as overall demand growth was solid, driven by servers for data centers.

By contrast, mobile competition is tipped to stay strong in the second half of 2018.

Although this latest S9 news isn’t positive for Samsung the firm is working hard to bring new innovations to customers.

Some analysts predict the company’s operating profit for the next quarter may reach 17 trillion won on the back of continuing demand for semiconductors throughout the year. That ended six straight quarters of earnings growth. Disappointing sales of Samsung’s flagship Galaxy S9 smartphones were largely to blame.

Sales of its first-half flagship Galaxy S9 and S9+ models were slow, the company said.

The Samsung Galaxy Tab S4, with the included S Pen, and featuring Samsung DeX, is displayed in New York, Wednesday, Aug. 1, 2018. As such, the company say it “will be offering the Note 9 at reasonable prices in order to maximize sales”. Smartphones accounted for 90 percent of its handset sales, it added.

Samsung is also expected to reveal a new big-screen smartphone from the Note family at its event in NY next week, with rumours tipping the device to feature a bigger display than before and coloured stylus. Notably, BOE, which is heavily subsidized by the government, is the world’s leading large-panel maker for TV screens, and it is aggressively venturing into producing OLED displays, a market dominated by Samsung.

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Looking to the second half, the TV market is projected to grow YoY, especially in developed economies. It was Samsung’s slowest profit growth for the company in more than a year.

Samsung's mobile woes drag on profit growth