Samsung Electronics Q2 Profit Expected to Plummet 96%, Lowest in Over 14 Years

Samsung Electronics Co, Ltd's SSNLF June-quarter profit will likely plunge 96% year-on-year to the lowest for any quarter in over 14 years, as an oversupply of chips continues to drive significant losses in its cash cow business amid a supply cut.

Operating profit likely fell to 555 billion won ($427 million) in the April-June quarter, Reuters cites a Refinitiv SmartEstimate.

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In the fourth quarter of 2008, Samsung reported a consolidated operating loss of about 740 billion won. It compares with an operating profit of 14.1 trillion won in the April-June quarter last year.

Samsung's chip division, traditionally its biggest earner, likely reported quarterly losses of around 3 trillion - 4 trillion won as memory chip prices fell further and it slashed its inventory values.

Prices of DRAM memory chips catering to smartphones, PCs, and servers - continued to slide in the quarter, falling about 13% - 18%, according to TrendForce, as chip buyers refrained from purchasing new chips and used up inventories.

Samsung is amid efforts to grow its share of chip demand from the field of artificial intelligence (AI), such as with high bandwidth memory (HBM) and chip contract manufacturing.

According to consensus, its mobile business likely reported an operating profit of around 3.3 trillion won as efforts to cut marketing costs offset a slight drop in smartphone shipments.

Samsung will likely launch its latest foldable smartphones in July in Seoul, weeks earlier than usual, to dominate the premium phone market for longer before rival Apple Inc AAPL releases its next iPhone, per analysts.

Photo by Pierre Lecourt via Flickr