Samsung’s Revenue Down Amid Weak Galaxy S9 Sales In Q2 2018

Samsung Electronics is seen at its office building in Seoul

Samsung Electronics is seen at its office building in Seoul South Korea

The local currency's weakness to its major peers, except the greenback, negatively influenced a net 400 billion won (358 million USA dollars) worth of operating profit compared with the prior quarter.

The largest smartphone and chip maker in the world said operating profit increased 5.7% to $13.3 billion during the second quarter, which was slightly higher than expectations.

All in all, Samsung Electronics has finally been hit by the sluggish smartphone demand all around the world.

"For DRAM, server demand stayed strong owing to the ongoing shift to higher density and expansion of data center infrastructure". "Profit growth is likely to be minimal considering slowing demand and intensifying competition".

As the demand growth is forecast to remain strong in the second half, Samsung predicts the bit growth rates of the memory chips to hover around the middle of the 10 percent range. It can also be used to navigate, translate and organize notes through Samsung Notes, and even send personalized texts through Samsung Live Message.

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Adding to its troubles, its vice-chairman Lee Jae-yong, scion of the Samsung group's founding family, was jailed a year ago for his part in the sprawling corruption scandal that brought down former president Park Geun-hye.

Overall earnings were sharply down from the 11.69 trillion won net profit registered last quarter, when the company reported a 52% jump on year.

Samsung has hopes that in the second half of the quarter the OLED demand will rise, and Apple's plan of introducing two new OLED iPhones would definitely help with that. That ended six straight quarters of earnings growth.

"Earnings in the mobile business slid considerably year-over-year as well as [quarter-on-quarter] due to weak sales of Galaxy S9 amid a stagnant high-end market", Samsung senior vice president of investor relations Robert Yi said during the July 30 earnings call.

Analysts have also pointed out that the Galaxy S9, the company's flagship smartphone for the year could be its worst selling Galaxy-S smartphone since the Galaxy S3.

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The smartphone market is overly saturated. It will also take steps to bolster the competitiveness of Samsung devices. The company launched their first Galaxy Tab tablet back in 2010 and since then it has evolved into multiple series of devices at different price points. The Galaxy Note 9 will be launched at Samsung's Galaxy Unpacked event on August 9, but countless leaks and rumours over the past few months have already hinted at most of the features of the upcoming phablet.

It's also thought that Samsung will push its display technology to a new level with an unbreakable edge-to-edge screen that covers every corner of the phone. However, analysts expected the company to post about $9.97 billion in income.

Looking to the second half, the TV market is projected to grow YoY, especially in developed economies. Samsung Knox, the company's enterprise solution, will allow IT managers to tailor interface with their business needs.

Samsung then said it is preparing the release of micro LED TVs customized for businesses and households, respectively.

The disappointment over the latest figures was reflected in afternoon trade, with Samsung Electronics shares down 0.5%. By segment, the chip business accounted for 6.1 trillion won, followed by the display division with 1.1 trillion won.

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Samsung said it also chose to hand out dividends of 354 won per shares, with the combined amount of 2.4 trillion won.

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