Samsung Electronics posts $9.9 bn Q2 net profit, down 0.1%

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Revenue declined about 4.13 percent from previous year, due to softer sales of smartphones and display panels, despite robust demand for memory chips. The unit accounted for as high as 78% of Samsung's overall operating profits during the quarter.

Net income rose to 11 trillion won (S$13.4 billion) in the three months ended June, the Suwon, South Korea-based company said in a filing on Tuesday (July 31).

Overall, the company reported $13.3 billion in profit, up 6 percent from the same time past year, on $52.1 billion in revenue.

Samsung Electronics Co yesterday reported a lower-than-expected gain in second-quarter earnings, indicating an end to its streak of record-breaking financial results as sales of smartphones and display panels slowed while memorychip profit stabilized.

Operating profits rose 5.7 percent year-over-year, but revenue fell 4 percent. Revenue shot up 25 percent to 21.99 trillion won over the same period. "The mobile market condition will likely remain challenging in the second half of the year amid pricing competition and new product launches".

But earnings in the IT and mobile communications (IM) division tell a different story. Not much is known about any of these phones except for Samsung's Galaxy F, which has been featured in rumors and reports for more than two years. Profits and revenues fell 65.9% and 24.8%, respectively, on quarter.

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

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If the estimate is realized, the Galaxy S9 would become the worst performing S-model since the Galaxy S3 in 2012. "But with a score of new releases reserved for launch and fiercer competition in function and price, the business environment continues to remain hard".

The Galaxy S7, by comparison, was Samsung's most selling smartphone ever.

Samsung launched the Galaxy J6 and Galaxy J8 smartphones with Super AMOLED Infinity display in India. As such, the company say it "will be offering the Note 9 at reasonable prices in order to maximize sales".

The company's first foldable smartphone - now dubbed the Galaxy X - is also tipped to breathe new life. "There also needs to be an accumulated scenario of user experience, so we've been working on it for years".

Despite some bumps in the road, the company's outlook remains sunny for the second half of 2018.

However, Samsung senior vice president of memory marketing Sewon Chun added, mobile is also driving one of the company's bright spots: a demand for high-density memory components.