In strict accordance with Samsung's financial performance in the second quarter of calendar year 2019 was bad to very bad. Company's quarterly revenue for the year by 4% to 56,1 trillion South Korean won ($47,51 billion). Operating profit during the same time collapsed by 56% to 6,6 trillion won ($5,59 billion). The main loss for Samsung was the decline in revenue and profits in the memory market. The company also lost money in the smartphone market, but not that much. Strong competition in the niche of entry-level and mid-range devices and declining demand for the company's flagship models have affected.
The lion's share of the company's semiconductor production comes from the production of memory. During the reporting period, operating profit in this area amounted to 3,4 trillion won ($2,88 billion). However, the performance achieved in this field was the lowest since the third quarter of 2016, when memory began to rise in price. The beginning of the decline in memory prices last year and high inventories of these products from suppliers and customers continue to put pressure on prices and manufacturers. Samsung says the memory market will remain uncertain until the end of the year. It can be imagined that the company cannot make a forecast from memory, as the trade war between South Korea and Japan is actively developing (see threats to stop the export of raw materials from Japan to Korea).
At the same time, Samsung decided not to follow in the footsteps of competitor SK Hynix. The latter promised to reduce investment in the development of memory production, reduce the production of NAND memory instead of 10% by 15% in the fourth quarter, and transfer part of the production lines from the production of DRAM to the production of image sensors. Not at all, Samsung announced that it will fulfill the investment plan for 2019 and will fully implement the funds remaining for capital expenditures in the second half of this year.
Of the individual anomalies in the report, we note an unexpected surge in the company's operating profit in the display niche. In this direction for a quarter Samsung received operating profit in the amount of 750 billion wons ($635 million). But the clue lies in a one-time payment from Apple for violating a contract to buy iPhone OLED displays from Samsung. In the autumn months, by the way, Samsung expects revenue and profit growth in the wake of the release of new smartphones from the company. So far, the mobile business is disappointing analysts. From sales of smartphones in the second quarter, Samsung received an operating profit of 1,56 trillion won ($1,32 billion). A year ago, this figure was almost twice as high. Even in the first quarter of this year, the company was able to earn significantly more than in the second. There is a suspicion that Samsung's performance was spoiled by the unsuccessful launch of Galaxy Fold smartphones with a folding display. Let's see how this device will show itself in September.
Some point of growth was Samsung's consumer electronics business. Operating income for the quarter was 710 billion won ($601 million). For this, the company thanks the growth in sales of OLED TVs and is going to start shipping 8K TV sets by Christmas.
Source: 3dnews.ru