Samsung reports 56% profit decline in Q2 on weak memory chip sales
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.
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.
Comments
* Or the company is dissolved, you get dividends, etc., but putting all the cavers into this rule of thumb just adds too much clutter.
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.
Samsung needs a new trick, and Apple has failed to provide them with one.
Bad Apple! Bad Apple!
#TimOnTheNaughtyStep
Samsung beat Apple to the market with a folding smartpho … er … never mind.
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?
What media outlets are gonna pick this up? Yet be sure to see more Apple doom articles coming...
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?
edit: note that Apple made almost twice as much profit this quarter.
https://youtu.be/nzj7Wg4DAbs
(Yes I noticed your wordplay. )
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...
Yeah, and there’s s boogeyman under your bed too.
Thievery and lack of R&D/innovation is finally coming home to roost.