Samsung estimates operating profit more than halved in 2nd quarter – Financial Times
What happened: Samsung Electronics expects its second-quarter operating profit to fall 56% year-on-year to KRW 6.5 trillion (around $5.55 billion), according to earnings guidance released by the company on Friday. The South Korean electronics giant said its revenue would likely fall 4% quarter-on-quarter to KRW 56 trillion. It will release a finalized earnings report later this month. The lowered earnings guidance came as global chip prices fell due to a supply glut and US sanctions on China’s Huawei, a major Samsung client, analysts said.
Why it’s important: Samsung is the world’s biggest maker of semiconductors and smartphones, as well as a major producer of display screens. The US campaign against Huawei has hurt chip demand, but Samsung is expected to see benefit in smartphone and telecom equipment sales. Analysts estimate Samsung could sell 37 million more smartphones annually if the Huawei woes continue. Samsung is also expected to increase its share of the global 5G network equipment market as global telecom operators boycott Huawei.