Samsung reports 56% profit decline in Q2 on weak memory chip sales

Posted:
in General Discussion edited July 30
Apple supplier and smartphone segment competitor Samsung Electronics on Tuesday reported a 56% decline in operating profits for the second quarter of 2019, blaming the downturn on continued weakness in the global memory chip market.




Slightly beating a bleak earnings forecast issued in early July, Samsung posted a profit of 6.6 trillion won (about $5.6 billion) on revenues of 56.13 trillion won for the three-month period ending in June, reports CNBC.

The result follows an equally dismal first quarter that saw profits dip 60% in the worst quarterly performance for the company since 2016. In both consecutive quarters, Samsung identified memory chip sales as the main contributor to its financial woes.

"The weakness and price declines in the memory chip market persisted as effects of inventory adjustments by major datacenter customers in the previous quarters continued, despite a limited recovery in demand," Samsung said in a statement on Tuesday.

Tuesday's results mark the third consecutive quarter of year-over-year profit declines for the Korean company.

Samsung would have seen an even lower number for quarter two if not for a one-time payment from Apple. The iPhone maker reimbursed the Korean tech giant an estimated 800 billion won for unfilled OLED orders after negotiations to find an alternative contractual solution failed.

Looking ahead, Samsung sees a path to return to profit growth in the coming months, but warns of overall market volatility due to "increased external uncertainties." A number of factors are putting pressure on device makers, from the U.S.-China trade war to a stagnating smartphone industry.
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Comments

  • Reply 1 of 23
    FatmanFatman Posts: 305member
    So, I made an s-load of money today in my Apple stocks holdings ... I’m a large shareholder, so I love high profits... but even this bothers me. Chip prices are plummeting, yet Apple still puts 128GB in a laptop. That is pure greed. 128GB costs them about $12.
    firelockentropysavon b7Sanctum1972anantksundaramravnorodombigtds
  • Reply 2 of 23
    SoliSoli Posts: 9,178member
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings
    You don't make or lose money in the stock market until you sell.*

    * Or the company is dissolved, you get dividends, etc., but putting all the cavers into this rule of thumb just adds too much clutter.
    edited July 30 1STnTENDERBITSmwhiteravnorodompscooter63magman1979StrangeDayswatto_cobra
  • Reply 3 of 23
    seanismorrisseanismorris Posts: 1,015member
    Soli said:
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings
    You don't make or lose money in the stock market until you sell.*

    * Or the company is dissolves or you get dividends, but putting all the cavers into this rule of thumb just adds too much clutter.
    Both paper money and digital money (or stocks) are strange concepts, both have little intrinsic value but we’ve decided as a society they do...

    One is paper and ink, the other is ones and zeros...

    From a logical perspective, the value of the persons Apple holding increased, so saying he “made money today” is reasonable enough...

    But, until he converts it into physical assets...both are kind of worthless.  What’s the difference between Bitcoin and the US Dollar? One, is said to have value because people have decided it has value.  The other... the same, but maybe it’s also a contract controlled by a specific entity.

    Anyways, the BS I just wrote is said to have value as data.  It could be used to manipulate someone else’s ideas, opinions or actions... so did I just make money? Physical BS might have more value..

    It’s a strange world we live in.  Sometimes I think “life” is just us brainwashing ourselves and others.
    pbruttoplanetary paulradarthekatsaudawguraharapscooter63gilly33watto_cobra
  • Reply 4 of 23
    MplsPMplsP Posts: 1,547member
    It’s rather interesting that memory chips make up that much of Samsung’s profits. Historically, the memory market has been volatile with thin Margins, so having that much of your profits linked to memory chips doesn’t seem like a sound strategy. 
    watto_cobraBart Y
  • Reply 5 of 23
    SpamSandwichSpamSandwich Posts: 31,301member
    Too bad, so sad.
    magman1979watto_cobra
  • Reply 6 of 23
    Rayz2016Rayz2016 Posts: 4,716member
    The problem is Apple. 

    Samsung needs a new trick, and Apple has failed to provide them with one. 

    Bad Apple! Bad Apple! 

    #TimOnTheNaughtyStep
    AppleExposedentropysradarthekatmwhitetmaypscooter63magman1979evilutionFileMakerFellergilly33
  • Reply 7 of 23
    Rayz2016Rayz2016 Posts: 4,716member
    Actually, that’s unfair. 

    Samsung beat Apple to the market with a folding smartpho … er … never mind. 
    wonkothesaneentropysmwhitepscooter63magman1979FileMakerFellerwatto_cobraBart Y
  • Reply 8 of 23
    AppleExposedAppleExposed Posts: 1,376unconfirmed, member
    Apple reports a record breaking quarter.

    Samsung loses 56% profit.....FIFTY-SIX. That's not half, that's MORE THAN HALF. Why do I get the feeling the media will ignore Samsung and continue to post "Apple is doomed" articles?

    Now take into consideration: Apple's "one-trick pony" was down yet they managed to set a record. Apple is growing for the long term.

    Meanwhile Samsung says chip sales are to blame. Weird, are their knockoffs not selling? Shouldn't they make up for the loss? 
    Or is Samsung a one-trick pony and making most profit from memory chips?

    What media outlets are gonna pick this up? Yet be sure to see more Apple doom articles coming...
    doctwelvemagman1979StrangeDayswatto_cobraBart Y
  • Reply 9 of 23
    chasmchasm Posts: 1,642member
    Fatman said:
    Chip prices are plummeting, yet Apple still puts 128GB in a laptop. That is pure greed. 128GB costs them about $12.
    Maybe you're right that it's pure greed. But maybe it's about not starting the MBP line at $1500. Possibly it is about the fact that most users now store their big "space eating" stuff (photos and videos, primarily) on iCloud/OneDrive/Google Photos/YouTube (or, for the likes of us nerds, personal network drives/clouds), leaving them with far less need for local storage.

    As an anecdotal example, my wife doesn't do backups. At all. Because there's almost nothing but apps and photos on her machine, and the photos are on iCloud. If her MBA crashed tomorrow, she'd lose her place in a couple of games. She would not lose any of her writing, her photos, her social media posts, or any of her apps (they're 100 percent from Apple or the Mac App Store).

    As an exercise, I invite forum readers to do the math: pretend all your media and key documents are on iCloud or your preferred paid cloud service (or the aforementioned network drive), and thus no longer stored locally. How much space is the remainder (apps + other documents) taking up?
    radarthekatStrangeDaysgilly33watto_cobra
  • Reply 10 of 23
    entropysentropys Posts: 1,795member
    You’re lucky you don’t live in the Outback, Chasm

    edit: note that Apple made almost twice as much profit this quarter.
    edited July 31 watto_cobra
  • Reply 11 of 23
    radarthekatradarthekat Posts: 3,114moderator
    Soli said:
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings
    You don't make or lose money in the stock market until you sell.*

    * Or the company is dissolves or you get dividends, but putting all the cavers into this rule of thumb just adds too much clutter.
    Both paper money and digital money (or stocks) are strange concepts, both have little intrinsic value but we’ve decided as a society they do...

    One is paper and ink, the other is ones and zeros...

    From a logical perspective, the value of the persons Apple holding increased, so saying he “made money today” is reasonable enough...

    But, until he converts it into physical assets...both are kind of worthless.  What’s the difference between Bitcoin and the US Dollar? One, is said to have value because people have decided it has value.  The other... the same, but maybe it’s also a contract controlled by a specific entity.

    Anyways, the BS I just wrote is said to have value as data.  It could be used to manipulate someone else’s ideas, opinions or actions... so did I just make money? Physical BS might have more value..

    It’s a strange world we live in.  Sometimes I think “life” is just us brainwashing ourselves and others.
    Here you go...

    https://youtu.be/nzj7Wg4DAbs
    watto_cobra
  • Reply 12 of 23
    radarthekatradarthekat Posts: 3,114moderator
    56% decline in profits.  That embarrassing.  Samsung should just Fold.
    MplsPGG1pscooter63magman1979watto_cobra
  • Reply 13 of 23
    gatorguygatorguy Posts: 20,894member
    56% decline in profits.  That embarrassing.  Samsung should just Fold.
    Samsung is doomed

    (Yes I noticed your wordplay. :) )
    edited July 31 muthuk_vanalingam
  • Reply 14 of 23
    sirozhasirozha Posts: 573member
    Soli said:
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings
    You don't make or lose money in the stock market until you sell.*

    * Or the company is dissolves or you get dividends, but putting all the cavers into this rule of thumb just adds too much clutter.
    Both paper money and digital money (or stocks) are strange concepts, both have little intrinsic value but we’ve decided as a society they do...

    One is paper and ink, the other is ones and zeros...

    From a logical perspective, the value of the persons Apple holding increased, so saying he “made money today” is reasonable enough...

    But, until he converts it into physical assets...both are kind of worthless.  What’s the difference between Bitcoin and the US Dollar? One, is said to have value because people have decided it has value.  The other... the same, but maybe it’s also a contract controlled by a specific entity.

    Anyways, the BS I just wrote is said to have value as data.  It could be used to manipulate someone else’s ideas, opinions or actions... so did I just make money? Physical BS might have more value..

    It’s a strange world we live in.  Sometimes I think “life” is just us brainwashing ourselves and others.
    The "physical assets" can become worthless overnight too. US Dollars are paper not backed by anything tangible, and is as much "scam" as "electronic currency". 
    gilly33
  • Reply 15 of 23
    MacProMacPro Posts: 18,352member
    AAPL almost at $220 after hours! 
    watto_cobra
  • Reply 16 of 23
    MplsPMplsP Posts: 1,547member
    chasm said:
    Fatman said:
    Chip prices are plummeting, yet Apple still puts 128GB in a laptop. That is pure greed. 128GB costs them about $12.
    As an anecdotal example, my wife doesn't do backups. At all. Because there's almost nothing but apps and photos on her machine, and the photos are on iCloud. If her MBA crashed tomorrow, she'd lose her place in a couple of games. She would not lose any of her writing, her photos, her social media posts, or any of her apps (they're 100 percent from Apple or the Mac App Store).


    I'm in that camp - All my documents are backed up on iCloud; The last time I had to do a fresh install of OS X, I simply wiped the hard drive, reinstalled all my apps and then logged in to iCloud. I do still have an old TimeMachine hooked up to my iMac that does backups.  

    I still keep everything locally on my computer, because I'm regularly working off wifi, so the 128GB hard drive is still an issue for me.

    Re the had drive price, one does need to keep in mind that an SDD is more than just the memory chips, and that the cost of memory is dependent on the kind, size, speed, etc, so you can't draw a direct line. Even still, Apple's historically high 'tax' on memory and SDD upgrades seems to have gotten even higher as of late...
    pscooter63watto_cobra
  • Reply 17 of 23

    sirozha said:
    Soli said:
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings
    You don't make or lose money in the stock market until you sell.*

    * Or the company is dissolves or you get dividends, but putting all the cavers into this rule of thumb just adds too much clutter.
    Both paper money and digital money (or stocks) are strange concepts, both have little intrinsic value but we’ve decided as a society they do...

    One is paper and ink, the other is ones and zeros...

    From a logical perspective, the value of the persons Apple holding increased, so saying he “made money today” is reasonable enough...

    But, until he converts it into physical assets...both are kind of worthless.  What’s the difference between Bitcoin and the US Dollar? One, is said to have value because people have decided it has value.  The other... the same, but maybe it’s also a contract controlled by a specific entity.

    Anyways, the BS I just wrote is said to have value as data.  It could be used to manipulate someone else’s ideas, opinions or actions... so did I just make money? Physical BS might have more value..

    It’s a strange world we live in.  Sometimes I think “life” is just us brainwashing ourselves and others.
    The "physical assets" can become worthless overnight too. US Dollars are paper not backed by anything tangible, and is as much "scam" as "electronic currency". 
    Yeah, and there’s s boogeyman under your bed too. 
    Soliwatto_cobra
  • Reply 18 of 23
    More apropos, it would appear — notwithstanding the Fold, or perhaps I should say, Fold as symptom of innovation rot — that Samsung as a personal electronics maker and as chip maker might be on course for a long-term decline. 

    Thievery and lack of R&D/innovation is finally coming home to roost.
    pscooter63watto_cobra
  • Reply 19 of 23
    davidwdavidw Posts: 975member
    Soli said:
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings
    You don't make or lose money in the stock market until you sell.*

    * Or the company is dissolved, you get dividends, etc., but putting all the cavers into this rule of thumb just adds too much clutter.
    That's not always true. If your stock holding was locked in an IRA, then yes, one isn't making (or losing) any real money until one sells.

    But the majority of my AAPL stock holding is in a Schwab stock portfolio and included is a margin account based on about 50% of the value of my portfolio. So when AAPL goes up, the amount of money that I can borrow from my margin account goes up. I can borrow 50% of AAPL upside without selling any AAPL shares and use the money to invest in other stocks or withdraw in cash. So long as the all money I've borrow from my margin account (plus the interest owe ) isn't over 50% of the value of my portfolio, I do not need to sell any of my stocks. But I do have to pay interest on the money I borrowed. Which is not a problem if my portfolio grows in value greater that what I have to pay in interest, every year. Figuring that if I sold any stock, my portfolio might not grow as much.

    With AAPL, I have borrowed against its upside since I've owned it, without selling any shares. And AAPL has gone up way more than the interest I had to pay on that borrowed money. Even when compounded over the years. AAPL is now paying about a 1.5% dividend, which I would lose on any shares sold, along with any upside gain. Plus the interest on the borrowed money can be deducted from any capital gains I have and carried over from year to year, if I don't have enough capital gains to deduct the whole amount in one year. Where CC and personal loans interest can not be tax deducted at all and home equity loans interest can only be tax deducted, in the same year, if one itemizes. (Which I haven't been able to do since paying off my home mortgage 5 years ago and even for 4 years before that because there was not enough interest paid toward the end on my home loan.)  So I managed to make money from my AAPL shares without selling any of it, by borrowing against it in my margin account. Even with years of interest compounded.

    If I had sold any shares of AAPL ten years ago, in order to have the money needed to pay off my CC, I would have lost ten years of AAPL upside, plus 7 years of dividend on those sold shares. If you were to calculated the amount of that lost and compare it to ten years of compounded margin interest, it's a no brainer that borrowing the money from my margin account, without having to sell any AAPL, was the right way to go. If I were to sell those shares today, I would still have a big gain from those shares after deducting all the interest I had to pay to keep them for another ten years. And yet I was able to pay off a CC debt with it, ten years ago, without selling any of it.  

    Of course, this is not true with all stocks and if i was anywhere near my 50% margin account limit, I might be forced to sell some stocks in my portfolio, on any big drop in AAPL share price.  Plus one can't really say they made money on just one day of upside as that can disappear the next day or next week. But the point is that over the span of years, one can make money on a stock upside, without selling.  
    edited July 31 avon b7FileMakerFeller
  • Reply 20 of 23
    Fatman said:
    So, I made an s-load of money today in my Apple stocks holdings ... I’m a large shareholder, so I love high profits... but even this bothers me. Chip prices are plummeting, yet Apple still puts 128GB in a laptop. That is pure greed. 128GB costs them about $12.
    So, couldn’t the term pure greed apply to a person making a s-load of money as well?
    Sanctum1972FileMakerFellergilly33watto_cobra
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