Samsung Electronics operating profit drops 55.2% in Q2

Samsung logo is displayed at the Samsung Electronics office in Seocho District, Seoul, Monday. Yonhap

Samsung Electronics announced Thursday that its operating profit for the second quarter dropped 55.2 percent from a year earlier, as growth in its electronic device earnings failed to offset the sharp decline in its chip business.

In a regulatory filing, the tech giant reported 74.57 trillion won ($53.53 billion) in sales and 4.68 trillion won in operating profit for the April-June period. While sales rose 0.67 percent year-on-year, operating profit was nearly cut in half compared to the same period last year.

The numbers fell far short of the brokerage consensus of 76.33 trillion won in sales and 6.27 trillion won in operating profit.

The chip-making Device Solutions Division posted 400 billion won in operating profit, down 93.85 percent from a year earlier, limiting the company’s overall profitability.

The company said provisions for inventory valuation and other one-off expenses negatively affected the performance of the memory business.

The company’s Device Experience Division, which handles finished products such as smartphones, TVs, refrigerators and other electronic devices, posted 3.3 trillion won in operating profit.

This marked a 22.22 percent increase year-on-year but a 29.8 percent decline from the first quarter of this year. Samsung attributed the slowdown to seasonal factors affecting the smartphone business and intensifying competition in the TV market.