Samsung estimates profit drop more than 50% again | Business

2019 is not an easy year for Samsung: for the third consecutive quarter, the company is projecting a 50% drop in profits. Between July and September, the company estimates an operating profit of 7.7 trillion won (about R $ 26.2 billion), less than half of the 17.57 trillion won (R $ 59.9 billion) for the same period. 2018.

Samsung - GDDR6

While Samsung’s operating profit is still respectable, the company has seen its financial results plummet this year. In the first quarter of 2019, profit fell 60%, despite good sales of the Galaxy S10. Between April and June, another drop compared to the previous year, this time by 56%. If Samsung’s new projections are confirmed, the reduction in the third quarter is also expected to be 56%.

Samsung is the world leader in the smartphone and TV market, but the division that actually prints money and represents two thirds of the company’s revenue is semiconductor. And although it continues to lead the industry, having broken Intel’s 24-year hegemony, the market is not doing well: since the end of 2018, memory chips have been priced lower and with low demand.

Both DRAM and storage (NAND) chips are selling less compared to last year. Between July and September 2018, Samsung had achieved the highest quarterly profit in the company’s history, mainly due to strong demand for server chips, video cards and components for cryptocurrency mining.

But it seems to be just a phase: according to an analyst heard by CNBC, the prices of NAND memories have already started to rise in the market; and DRAM chips are also expected to increase in the coming quarters. Samsung’s profits, therefore, are expected to grow again from 2020.

According to Samsung’s projections, sales in the third quarter are expected to be 62 trillion won, equivalent to R $ 211.6 billion (!) And a decrease of approximately 5% compared to the same period in 2018. We will know the exact numbers when the company discloses its official financial results, which should happen on October 28.

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