Published: Thu, August 02, 2018
Industry | By Jeannie Evans

Samsung profit growth slows

Samsung profit growth slows

The Galaxy Tab S4 WiFi version will be available in the U.S. starting at $649.99 on August 10, 2018 at Amazon, Best Buy and Samsung.com. Analysts pointed to increased competition among Android manufacturers for the slowing growth, with the firm's flagship Galaxy S9 device missing sales targets.

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

However Samsung said operating profit from the mobile business recorded its steepest rate of decline since the first quarter of 2017 and it gave investors little reason to hope for a quick turnaround in the mobile business, flagging stiffer competition in the second half amid concerns its premium phones lack innovation to drive sales growth.

Samsung came out with a rosy outlook on the product sector in the second half, citing anticipation of continuing demand regarding server expansion and the release of new smartphones that are to use its chips.

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. Now, Samsung has also given a price cut to the popular Galaxy J6 smartphone for the second time.


On the display side Samsung said earnings were weak due to decline in sales volumes, but OLED flexible panels are expected to increase sales.

Strong demand for Samsung's memory chips resulted in the operating profit expansion. As such, the company say it "will be offering the Note 9 at reasonable prices in order to maximize sales". To make matters worse, Chinese panel makers have been flooding the market with cheaper flat screens, hurting Samsung's earnings. The device has been outfitted with a 6.95-inch AMOLED screen, larger than the Note 9's 6.3-inch display and the iPhone X's 6.5-inch display.

A rise in costs for marketing new models also dealt a blow, the company said. The company said the business micro LED TVs will be mass produced starting in October, with those for households reaching the market in 2019. Inside, Samsung has opted to go for a chipset from Qualcomm rather than something in their Exynos collection.

For the first half of 2018, Samsung invested 13.3 trillion won in chips and 1.9 trillion won in displays, rolling out a combined 16.6 trillion won in facilities investment. The mobile business booked 2.7 trillion won in quarterly operating profit.

Samsung shares slid 0.5 percent by 0254 GMT, compared with 0.1 percent drop in the broader market .KS11 .

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