Samsung Q2 revenue down 6%; Operating profit up 23%

Samsung Electronics reported today KRW 52.97 trillion in consolidated revenue and KRW 8.15 trillion in operating profit for the second quarter ended June 30, 2020.

Quarterly operating profit rose 26 percent from the previous quarter and 23 percent from a year earlier, thanks to firm demand for memory chips and appliances, as well as a one-off gain at its Display Panel Business.

Revenue in the quarter fell 4 percent from the previous quarter and 6 percent from a year earlier due to reduced sales of smartphones and other devices.

Earnings from the Memory Business improved, led by solid demand from datacenters and PCs. However, slower demand for mobile memory resulted in weaker NAND bit growth compared to the market. System LSI reported lower earnings amid weakness in the mobile market while the Foundry Business saw a recovery in customer demand.

In the Display Panel Business, a one-off gain boosted profits from mobile displays while the company saw losses from larger panels narrow slightly on increased sales of monitors. The Mobile Communications Business reported solid profitability on marketing cost reductions and other cost optimizations, despite weaker sales of smartphones.

The Consumer Electronics Division posted higher earnings over growing sales of appliances such as air conditioners and dryers, as well as premium TVs including QLED models. HARMAN reported an operating loss amid deteriorating market conditions in the global auto industry.
For system semiconductors, the company will focus on expanding sales of key products such as high-resolution sensors and 5G system-on-chips (SoCs).

The Mobile Communications Business plans to unveil new flagship smartphones including the Galaxy Note and a foldable phone, while seeking to expand sales of mid-tier models. The smartphone market is expected to witness intensifying competition amid a gradual recovery in demand in the second half of the year.

Looking ahead to the third quarter, smartphone sales are expected to rise QoQ, backed by a stronger product mix thanks to the launch of new flagship models, including the Galaxy Note and a new foldable phone, to be introduced at the upcoming virtual Galaxy Unpacked event on August 5th.
As for the Networks Business, investments in 5G services were delayed in both domestic and overseas markets due to the global spread of COVID-19. While there are still uncertainties over network operators’ investment schedules, Samsung will continue to explore new opportunities for business expansion.

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