Samsung warns financial profits melting: Samsung Electronics said it expected a drop in operating income in the second quarter of the year, Friday, July 5, 2019. Its profit is indeed halved, 56% in total over the period April to June, to fall to 6.5 trillion won, or 4.9 billion euros. However, it remains above the Refinitiv SmartEstimate consensus, based on analysts' estimates, which anticipates an operating profit of 6 trillion won.

The South Korean giant points the consequences of the trade war between the United States and China, which weighs on the global demand for smartphones and chips. The world's largest smartphone sales company, which is due to release its detailed results in July, is set to post a third consecutive quarter of year-on-year earnings declines. In particular, it suffered from the decline in the price of chips in the face of oversupply and US sanctions against the Chinese telecom group Huawei, a major customer of the world's largest manufacturer of memory chips.

Samsung warns financial profits melting

Other South Korean tech groups also struggling

Samsung, like other South Korean technology groups, is also subject to Japanese restrictions on exports to Seoul of components used in chips and smartphones, a measure of retaliation against South Korean claims for compensation in the Second World War which, according to Tokyo, were settled several decades ago.

"The intensification of the US-China war, Japan's export restrictions and signs of an escalation of trade disputes may delay recovery," said Daishin analyst Lee Kyoung-min. Securities.


For the second quarter, Samsung nevertheless enjoys an exceptional gain from the screen division, which provides Apple, said the group's management without further details. The Apple brand has repaid Samsung about 800 billion won for missing a sales target agreed between the two groups, according to analysts.

South Korea lowered its growth target

In addition to the decline in operating income, Samsung expects a 4.2% decline in revenue. His compatriot LG Electronics is also struggling as its operating profit is expected to fall by 15.4 percent in the second quarter.

South Korean memory chip makers like Samsung and SK Hynix are hard hit by rising tariffs that affect global demand for electronic products. South Korea on Wednesday lowered its annual economic growth target to a seven-year low on the back of a collapse in exports.