Samsung Electronics’ second quarter operating profit stood at a slightly better-than-expected 6.5 trillion won ($5.5 billion) on a temporary surge in profit from Apple, data showed on July 5.
Quarterly revenues stood at an estimated 56 trillion won, down 4.2% from the same period last year. Operating profit tumbled 56.3% during the like period. Compared to the third quarter of 2019, profit fell more than 60%.
When excluding the extraordinary revenues from the California-based tech firm guessed to reach around 900 billion won, the quarterly profit just met market projections of a little over 6 trillion won.
The biggest contributors to the sluggish growth were the SET (end-product) business and memory chips.
“The slow SET demand has triggered a supply glut in parts and components,” said one industry watcher. “The trade war between the US and China, and the sanctions from Japan are making it quite difficult to predict what the latter half of this year will bring.”
Following the Tokyo government’s recent decision to stifle its exports of key semiconductor materials to South Korea, Samsung Electronics Vice Chairman and heir Lee Jae-yong on July 7 landed in Japan to discuss emergency measures.
Meanwhile, the profit from Apple is presumed to be a fine the American company paid out for failing to take the agreed volume of flexible OLED panels. Samsung Display, the panel suppliers, is seen to have posted a 600 billion won in the black.
Semiconductor-related operating profit is projected at around 3.5 trillion won. Operating profit from the IT & Mobile Communications business is likely to fall to around 2 trillion won on increased marketing costs for the Galaxy S10.
The Consumer Electronics business, on the other hand, is expected to have logged 600 billion won or more of profit on robust sales.
Samsung Electronics did not provide the quarterly earnings of each business department.
The Elec is South Korea's No.1 tech news platform.