SEOUL, Jul 27 (NNN-YONHAP) – South Korea’s tech firm, Samsung Electronics, posted a sharp fall in second-quarter earnings, as weaker global demand for locally-made semiconductors led to a large deficit in the chip-making division, the company said today.
Samsung’s consolidated operating profit dropped 95.3 percent from a year earlier to 668.5 billion won (525.6 million U.S. dollars) in the Apr-Jun quarter.
Revenue declined 22.3 percent to 60 trillion won (47.2 billion dollars), and net income plunged 84.5 percent to 1.72 trillion won (1.4 billion dollars).
Samsung’s chip-making business recorded an operating loss of 4.36 trillion won (3.4 billion dollars), on consolidated revenue of 14.73 trillion won (11.6 billion dollars) in the second quarter.
Samsung logged an operating loss for the second successive quarter, marking the first time in about 14 years since the South Korean company posted operating losses in the fourth quarter of 2008 and the first quarter of 2009.
The chip-making unit’s second-quarter loss was down compared to an operating loss of 4.58 trillion won (3.6 billion dollars) in the first quarter, due to more limited price drops for both DRAM and NAND chips, Samsung said.
The company forecast that, the global chip market would gradually move towards stability in the second half, when considering the increasing production cuts in the industry, while inventory adjustments by customers were likely to wind down.
In the system large-scale integration business, the recovery of demand for major applications, such as mobile, would be delayed in the second half, due to depressed consumer sentiment, while the foundry business would see demand gradually improve for the rest of this year, Samsung noted.
The display panel unit registered an operating profit of 840 billion won (660.4 million dollars) on revenue of 6.48 trillion won (5.1 billion dollars) in the Apr-Jun quarter.
Samsung expected the unit to see earnings improve in the second half, as its mobile panel customers released new products despite the expected uncertainty over the large panel market.
The mobile phone and networks business recorded an operating profit of 3.04 trillion won (2.4 billion dollars) on revenue of 25.55 trillion won (20.1 billion dollars).
Samsung said, the overall market demand weakened in the second quarter due to higher interest rates and inflation, but it noted that, the overall smartphone market would return to year-on-year growth in the second half, especially in the premium market.
The TV and home appliances unit posted an operating profit of 740 billion won (581.8 million dollars) on revenue of 14.39 trillion won (11.3 billion dollars).
Samsung said, TV demand declined in the second quarter compared to the previous quarter on the back of seasonal spending trends, predicting the premium TV market to remain robust in the second half.
Samsung’s total capital expenditure in the second quarter came in at 14.5 trillion won (11.4 billion dollars), including 13.5 trillion won (10.6 billion dollars) for chips and 600 billion won (471.7 million dollars) for displays.– NNN-YONHAP
