Samsung Electronics reports lower-than-expected profit


SEOUL, South Korea (AP) – Samsung Electronics Co. said Tuesday its second-quarter earnings rose 2 percent over a year earlier, missing expectations due to sales of smartphones and display panels that offset robust memory chip sales.

The South Korean tech giant said that its April-June net income stood at 10.98 trillion won ($9.8 billion), compared with 10.80 trillion won a year earlier.

The result fell short of the analyst consensus of 11.14 trillion won, according to financial data provider FactSet.

Sales fell 4 percent to 58.48 trillion won ($52.3 billion) while operating income advanced 6 percent to 14.87 trillion won ($13.3 billion), in line with its earnings preview earlier this month.

The latest results indicate an end to Samsung’s streak of record-breaking financial results that stunned investors. Samsung, the world’s largest maker of memory chips, smartphones and display panels, reported explosive profit growth in 2017, driven by an unprecedented boom in memory chip business.

The profit growth in the memory chip business began to stabilize this year but it is still the lion’s share of Samsung’s bottom line. During the second quarter, its semiconductor business generated 11.61 trillion won ($10.39 billion) in operating profit, nearly 80 percent of the entire operating income.

Samsung said sales of Galaxy S9 smartphones slowed while its flagship memory chip business continued to post a robust result. Its phone business reported 2.67 trillion in operating income during the three-month period, lower than the first quarter as growth in the premium smartphone market stagnated while it had to spend more marketing expenses to promote the S9 flagship model.

Samsung gave an upbeat forecast on the semiconductor industry, echoing the rosy view of other memory chipmakers. But it expected challenges in the mobile business going forward.