Tech giant barely remained profitable in Q2
South Korea’s Samsung Electronics barely remained profitable during the second quarter of this year due to the weak global demand for the firm’s representative products of memory chips.
The Seoul-based company disclosed its earnings guidance on July 7 that its operating profit would amount to $461 million during the April-June period, down 96 percent from a year before.
It is the worst quarterly profit in 14 years. The tech giant’s sales are also likely to dip 22.3 percent to $46 billion.
The firm did not reveal the results for each business, and the final report is due late this month. Yet, its semiconductor sector is estimated to have chalked up multi-billion dollars of loss due to the ongoing slump of the related industry.
Global chip inventories bulged substantially over the past several months because of the plunging global demand, weighing on such major firms as Samsung, SK hynix, and Micron Technologies.
In the first quarter, Samsung Electronics also saw its chip division suffer a deficit of $3.5 billion. Without the outstanding performance of its smartphone business, the firm could have turned into a deficit.
Things are expected to get better later this year as observers predicted on July 10 that the world’s largest manufacturer of memory chips and smartphones would turn around soon.
KB Investment & Securities came up with a report Monday to forecast that Samsung Electronics would rack up an operating profit of $2.8 billion during the third quarter.
The brokerage expected that Samsung’s semiconductor business would almost halve its operating loss during the third quarter and turn a profit in the final quarter.
Mirae Asset Securities also projected that Samsung’s operating income would be $2.5 billion and $3.7 billion in the third and fourth quarters, respectively.
The share price of Samsung Electronics dipped 2.37 percent on July 7 and 0.57 percent on July 10 on the South Korean stock exchange.
