Samsung Q2 operating profit growth slows down Galaxy S9 sales are lower than expected

- Aug 01, 2018-

Samsung Electronics is struggling in the Chinese smartphone market and its second-quarter earnings report is sluggish. On the bright side, the Korean technology giant said its semiconductor business performed well.


Operating profit increased by 5.7% year-on-year to 14.9 trillion won (approximately $13.3 billion), the lowest quarterly profit growth for Samsung Electronics since the first quarter of 2017. Net income was 11 trillion won (about 9.8 billion US dollars), and sales revenue fell 4% to 58.5 trillion won (about 52.3 billion US dollars).


Samsung attributed this result to its flagship handset, the Galaxy S9, which sold less than expected for seasonal and low-cost handset competition. In particular, two Chinese companies, Xiaomi and Huawei, have become their strong competitors, putting pressure on Samsung in China and India.


As in previous quarters, Samsung's semiconductor business has performed strongly, even as its smartphones are affected. Samsung reported that its chip business operating profit for the second quarter increased by 45% year-on-year to 11.6 trillion won. The company said that due to the demand for high-density data centers, the demand for chips in the second half of the market is expected to remain strong. However, due to the competition of low-cost devices with strong specifications on the market, Samsung expects that the demand for its smartphones and tablets will continue to lag.