Samsung stock tumbles after profit drops 56% in second quarter

Samsung Profit Slumps on Chip Market Slow Flagship Smartphone Sales

Samsung Profit Slumps on Chip Market Slow Flagship Smartphone Sales

Samsung has posted its financial numbers for the second quarter of the year, posting 56.13 trillion won ($47.4 billion) in consolidated sales and 6.6 trillion won ($5.58 billion) in operating profit, representing a 56 percent drop.

Samsung said it expects troubles in the memory business to continue for the rest of 2019 as the global economy comes under pressure.

Other factors affected Samsung's bottom line, including weak sales of iPhones, for which it supplies parts, and the ongoing US-China trade war.

Samsung said in a statement memory chip demand was expected to grow in the second half, backed by its server DRAM customers resuming purchases.

South Korea's chip giants also have been hit by Japanese curbs on the export of key materials, the latest salvo in a diplomatic row between Seoul and Tokyo over wartime forced labour.

GOP Sen. Josh Hawley: Big Tech Embraces Addiction As A Business Model
Josh Hawley (R-MO) speaks during a hearing before the Senate Judiciary Committee March 12, 2019 on Capitol Hill in Washington, DC. A Snapstreak occurs when two Snapchat friends have snapped each other within 24 hours for more than three consecutive days.

The company also said it would focus on the launch of new products in the third quarter including its first folding smartphone, which got off to a shaky start. Its stock, which has gained 20% so far this year, fell 2.6% as of 0338 GMT while the broader market was down 0.9%.

The South Korean firm posted operating profit of 6.6 trillion Korean won ($5.6bn; £4.6bn) for the three months to June, a 56% drop from the 14.87 trillion Korean won posted in the same period a year earlier. Operating profit for the firm's chip business was down 71 percent YoY to 3.4 trillion won, with revenue at 16.09 trillion won.

Shares in Samsung Electronics Co Ltd (SSNLF) tumbled as much as 3.3% in Seoul following the announcement. Arch rival Apple Inc on Tuesday reported another quarter of lower iPhone sales but boosted overall revenue thanks to the rising contribution from content services such as music and apps, which Samsung lacks.

Last week, Samsung said the Galaxy Fold will go on sale in September after improvements were made to the smartphone.

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