Finance, News, Retail

Samsung’s record breaking profits come to an end


Connor James Ibbetson, Editor-at-large

New quarterly profit figures bring Samsung record breaking to an end.

Published this morning, Samsung’s profits for the second quarter ending June 30, 2018 see the companies streak of record breaking profits come to an end.

In the published statement, the tech giant reported an operating profit of 14.87 trillion won on sales of 58.4 trillion won – that’s about 51,771,844,000 USD or 39,391,901,803 GDP worth of raw sales.

Despite the huge earnings, the takings fell 4 percent from the same time last year.

The company suggested that lower than expected sales of smartphones, such as their new S9 handsets, and lower sales of flexible OLED panels were the cause.

In Samsung’s Consumer Electronics Division, sales of the companies high end smart televisions were up – apparently boosted by the world cup. However this was balanced in a reduced demand for air conditioning units – despite the recent heat wave which has come too late to boost sales in the previous quarter.

Profits were mainly bolstered by the demand for microchips and semiconductor technology ‘driven by demand for DRAM chips used in data centers and NAND flash memory for high-capacity storage’.

What happened with Samsung’s smart phones?

The company reported that slower than expected sales of the new S9 and S9+ handsets, as well as phasing out of older and obsolete models were responsible for the drop in profits in the increasingly competitive smartphone market.

However mobile communication technology profits remained strong in the face of low handset sales, as the company saw ‘healthy sales growth as major overseas carrier partners increased investments in LTE expansion’.

Looking into the coming quarter – the S9 Note gets an early release

Moving into the next quarter the company predicts sales of its flexible OLED screens announced recently will rise, likely as new applications for the technology are devised.

Increasing demand for PC and server memory will also sustain sales of the companies memory chips.

Samsung’s estimations of the smartphone market are positive as well. Predicting that ‘Demand for smartphones and tablets is forecast to increase in the second half as the market enters a period of strong seasonality.’

In response to the low S9 sales, and expecting demand to rise in the lead up to christmas, the company will likely press on with an earlier than planned release of the new S9 Note – as well as ‘competitive mid- and low-end models with new features’.

Samsung also aims to benefit from the development of new mobile technology such as 5G and the internet of things in the near future.

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