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July 6, 2018

Samsung forecasts dip in Q2 2018 profits following weak smartphone sales

by John_A

Samsung is still making boatloads of money, but profits don’t quite match up to previous quarters.

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Samsung announced record earnings for four straight quarters, but that streak is about to come to an end. In its Q2 2018 earnings guidance, Samsung is forecasting an operating profit of $13.2 billion (14.8 trillion won), up 5% from the same period a year ago.

Overall revenue at $51.7 billion (58 trillion won) is less than the $54.8 billion the company raked in last year. To put things into context, Samsung made a profit of $14.6 billion on revenues of $56.5 billion last quarter.

As noted by The Wall Street Journal, Samsung’s profits over the course of the last year were bouyed by strong perfromance by the manufacturer’s semiconductor division, which overtook Intel last year. Samsung may not be able to maintain its edge in this category, however, as NAND and DRAM module prices are expected to fall by up to 15%.

Slow sales of the Galaxy S9 series is attributed as a reason for the decline in revenue, with the company estimated to ship 31 million units this year. To compound matters, it looks like Apple is siding with LG as the display vendor for the upcoming iPhone to reduce its reliance on Samsung, and that has a potential to hurt Samsung’s display business.

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