Samsung predicts another big drop in quarterly profits, but it could be the last one

Samsung predicts another big drop in quarterly profits, but it could be the last one
Due to a slump in global sales of both high-end smartphones and memory chips, Samsung didn't have the best of quarters between April and June, shedding no less than 56 percent of its overall profit gained during 2018's second quarter. The chaebol is now out with its latest earnings guidance, and although the financial results for the July - September timeframe are not final yet, it looks like the tech giant's consolidated operating profit has once again declined by exactly 56 percent compared to the same quarter of last year.

That sounds pretty bad, and it's certainly not good no matter how you look at the situation, but the company can find a little solace in the fact this Q3 2019 total of approximately 7.7 trillion Korean won ($6.4 billion) represents a small improvement from the KRW 6.6 trillion reported for the year's second quarter. Consolidated sales are also on the rise sequentially, from a little over 56 trillion won in Q2 2019 to around 62 trillion won between July and September. 

Interestingly, that 62 trillion won result is actually not significantly lower than the KRW 65.46 trillion posted back in Q3 2018, which means Samsung's profit margins have been substantially thinning down. That's largely because memory chip prices have dwindled over the last year or so, while mid-range smartphones are becoming a more vital part of the company's product portfolio.

That being said, all signs point to the premium Galaxy Note 10 family meeting and even exceeding demand expectations in key global markets, although we'll have to wait a few more weeks for Samsung to put together the final and detailed Q3 2019 financial report, where we'll be able to see if the mobile division results are up or down compared to the same period back in 2018.

It's also worth pointing out that the consensus among analysts appears to be the worst is now over for Samsung, which might be able to soon rebound and start boosting its profit again. Maybe not by the end of the year, but most likely next year thanks to a slowly improving "industry-wide situation" as far as both chips and phones are concerned.

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24 Comments

2. gadgetpower

Posts: 283; Member since: Aug 23, 2019

This is really sad news. It only implies that in android world innovation isn’t important, price is what all matters. This is good for consumers because after a few months, the price of their flagships dropped and more freebies to give away.

26. AlienKiss

Posts: 200; Member since: May 21, 2019

Was planning on getting the Note 10+, but I'm waiting for the S11+ now.

8. strawberry

Posts: 115; Member since: Feb 20, 2019

lucky i am not samsung shareholder

15. ph00ny

Posts: 2055; Member since: May 26, 2011

Why not? There is a lot to look forward to with them in the future 1. Nvidia's next gen GPU is going to be manufactured by Samsung using 7nm EUV process 2. Just announced 12 layer 3D DRAM stack which is supposedly going to be used in 24GB HBM2 3. Galaxy Fold is supposedly a big hit and lowered priced (hopefully improved) version is in the works 4. Recently picked as 5G hardware supplier for one of Japan's telecom company (I don't think this is reported in iphone arena yet) Aren't they still dumping more money into R&D compared to anyone else in the tech sector?

19. srgonu

Posts: 557; Member since: Feb 13, 2012

20. pimpin83z

Posts: 591; Member since: Feb 08, 2019

Exactly.

21. Tipus

Posts: 894; Member since: Sep 30, 2016

PA needs to create fanboys wars, more clicks more money :)) And like greendude said it's not worth to pay for a note 10 a grand. But you have to be complete retard to pay even more than that for an iphone :))

22. apple-rulz

Posts: 2195; Member since: Dec 27, 2016

And here is king of the retards AKA tipus, king of the android trolls!

23. darkkjedii

Posts: 31304; Member since: Feb 05, 2011

That's grazer logic. Pay $1350 for a one trick pony 512 only iPhone, but the do it all, and then some 512 + 1teryabit Note 10+ isn't worth $1200. Puuuuuuulease lol. I kept my XS Max to go along with my Note 10+.

24. Tipus

Posts: 894; Member since: Sep 30, 2016

I paid for my note10+ $400 after trade in including another $200 worth of freebies from samsung. Only because of this offer i didn't keep my note9. After a month of ownership i can say there's few things i miss from note9. And one thing i'm sure is i wouldn't pay full price for it. But to each their own. To apple-blowz - sorry if i hurt your feelings buddy, get that ointment, you should feel better :))

25. darkkjedii

Posts: 31304; Member since: Feb 05, 2011

I miss the Iris scanner, hate Samsung removed it.

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