Samsung Electronics recorded its worst performance in 14 years in the second quarter of this year due to sluggish smartphone sales and a downturn in the semiconductor industry.
On the 7th, Samsung Electronics announced that its consolidated sales for the second quarter were 60 trillion won, down 22.28% compared to the same period last year. This is a 5.88% decrease from 63.75 trillion won in the first quarter of this year. Operating profit was provisionally estimated at 600 billion won. Although this exceeded the securities market consensus estimate of 281.8 billion won, it fell 95.74% compared to the operating profit of 14.1 trillion won in the second quarter of last year. It also decreased by 6.25% from 640 billion won in the first quarter of this year.
The operating profit is the lowest since the first quarter of 2009 (590 billion won), during the global financial crisis. Samsung Electronics has failed to exceed 1 trillion won in operating profit for two consecutive quarters.
However, since provisional results are not calculated in detail down to the 10 billion won unit, there is a possibility that the confirmed operating profit for the second quarter, to be announced at the end of this month, could range from 600 billion to 690 billion won.
Detailed performance by business division was not disclosed. Industry insiders believe that considering the increase in DRAM shipments in the second quarter, the deficit in the semiconductor (DS) division likely improved compared to the first quarter (4.58 trillion won). However, it is estimated that the MX (Mobile Experience) and Network divisions, responsible for smartphones, posted worse results than the first quarter due to a decline in the effect of new product launches in the second quarter. The VD and home appliances (Video Display Appliances) divisions are also estimated to have improved performance compared to the first quarter due to new TV products and the peak season effect for air conditioners.
With the semiconductor industry recovering from the bottom and the upcoming 'Galaxy Unpacked' event on the 26th, where new smartphone products will be launched, expectations for improved performance in the second half of the year have increased.
Meanwhile, Samsung Electronics is likely to record lower operating profit than LG Electronics in the second quarter as well, following the first quarter. The securities market consensus estimate for LG Electronics' consolidated operating profit for the second quarter, to be announced this afternoon, is 977.9 billion won. In the first quarter, LG Electronics recorded an operating profit of 1.4974 trillion won, surpassing Samsung Electronics' 640.2 billion won.
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