Samsung reports its weakest profits since late 2016

Samsung has reported its weakest profits in two years as first quarter earnings suffered from weak smartphone and memory chip sales.

While Samsung said that it expects things will be get better in the second half of the year, the immediate outlook isn’t great. Samsung posted operating profits of $5.4 billion for the quarter, its smallest since late 2016. By comparison, this quarter last year raked in $13.4 billion.

Overall revenue fell 13.5%. The company’s semiconductor business, meanwhile, suffered a big 64% decline, while the display business racked up 560 billion won ($480 million) in losses. That’s not good, since Samsung had seemingly been pivoting toward relying more heavily on these parts of its business. As with other manufacturers, these businesses are suffering from the slowdown in smartphone sales.

Samsung’s own smartphones didn’t do too badly, however. This was particularly true at the top end. Samsung’s Galaxy S10 lineup reportedly showed “solid” sales. In total, Samsung shipped 78 million of these handsets. Its lower and mid-range devices fared less well, though.

What happens next?

But the bad news probably won’t end there for Samsung. The company’s next financial quarter is unlikely to see things turn around immediately. It will also see the fallout of Samsung’s Galaxy Fold handsets. The company has pushed back their launch date after early reviews noted that the pricey $1,980 handset suffered serious screen problems.

Apple hasn’t been immune to the overall slowing of the smartphone business, either.¬†When it announced its most recent earnings in January, it revealed a drop of 15 percent of iPhone sales. This impact has also hurt a number of companies which do business with Apple, which have relied on ever growing smartphone sales. Apple’s latest earnings will be revealed later today. Here’s what we’re expecting to see from them.

Source: Reuters and The Verge