Samsung Q2 Profit Expected To Drop, Q3 To Soar With Note 9

Samsung Electronics’ operating profit this quarter is believed to be slightly lower than its profit from the first quarter due to the sluggish sales of the Galaxy S9 flagship series. However, the company’s performance is predicted to pick up in the third quarter when the Note 9 is officially launched.

Industry sources told South Korean media outlets on Sunday that Samsung’s second-quarter profit is expected to drop slightly than the figure the firm posted in the January-March period. According to the sources, Samsung will likely post a 15 trillion won or US$13.5 billion operating profit for the April-June period, The Investor reports.

If true, then Samsung will see a drop from its 15.64 trillion won or US$14 billion record during the previous quarter. Sources are blaming the lower profit on the disappointing global sales of the Galaxy S9 and S9+ handsets. While Samsung’s latest flagships dominate the market in its home country, the same cannot be said of the devices’ performance outside of South Korea.

Last month, IBTimes learned that Samsung was carrying out an investigation on its operations in the United States amid the reported “sluggish sales” of the S9 flagship phone in the country. A spokesperson for the company maintained that the large-scale inspection program wasn’t related to the performance of the S9 in the U.S. market.

“The inspection is not a punitive measure targeting a specific underperforming unit,” the Samsung spokesperson said. “It is a usual process aimed at reviewing the status of business departments and global offices. We usually address problems based on the results, if there are any.”

The possible reduction in the operating profit of Samsung in the second quarter would mark the first decline in five quarters for the company. Thus far, Samsung has broken every quarterly record since the second quarter of 2017.

Samsung can look forward to a more favorable report in the third quarter of this year, however. Market experts are claiming that the company will likely create a new record of 17.3 trillion won or US$15.5 billion thanks to the Galaxy Note 9 and the booming overseas demand for semiconductors and OLED panels.

“In the third quarter, Samsung Electronics will make another record-breaking performance on upbeat DRAM prices and rising operating rate of OLED panels. The upcoming release of the Galaxy Note 9 will also help increase the third-quarter earnings,” South Korean security brokerage and investment banking service Shinhan Investment Corp. said.