Jul 5th, 2019

Samsung has announced that it expects its Q2 earnings report to reflect a massive drop in profits. Based on the report, Samsung is expecting Q2 2019 profits to come in at 6.5 trillion won (a bit shy of $5.6 billion), 56% less than what the company posted in Q2 of 2018. While $5.6 billion in profits is still quite respectable, the number is the lowest since Samsung has to recall the Galaxy Note 7 in Q3 of 2016. 

At this time, Samsung has not given any specifics regarding the massive drop in profits, but there are many factors to consider. Earlier this year, Samsung reported that its memory chip business was suffering from slow sales and a recent supply chain report claims that slow iPhone sales have led to Samsung’s display business to ship fewer panels than previously planned. Apple is said to have reimbursed $684 million to Samsung for not meeting its contract obligations, but it’s unclear if that payment is factored into Samsung’s Q2 earnings projections. 

Sales of the Samsung Galaxy 10 lineup did have a positive effect on Samsung’s bottom line in Q1 of this year, but it doesn’t look like there’s been enough demand for the new phones to keep Samsung’s profits moving upwards. Samsung has not indicated the Samsung of the Galaxy S10 has been selling slower than expected, but the company has also been pretty silent regarding shipments. Industry reports have shown that sales of the S10 lineup were higher than those of the S9 through the month of May, but only by about 15%.

Fortunately, Samsung will be unveiling the Galaxy Note 10 in August. The launch of Samsung’s mid-year flagship smartphone should give the company’s bottom line a noticeable boost since it is expected to finally feature a bit of redesign which should be well-received by Samsung’s Note fans.

Source: Samsung Newsroom 

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