Apple vendor and smartphone segment competitor Samsung Electronics on Tuesday reported a 56% decline in second quarter 2019 operating profit, and owe the decline to continued weakness in the global memory chip market.
Turning a weak earnings forecast issued in early July, Samsung posted a profit of 6.6 trillion won (about $ 5.6 billion) on revenue of 56.13 trillion won for the three-month period ending in June , reports CNBC [19459021
The result follows an equally bleak first quarter that saw profits dip 60% in the company's worst quarterly performance since 2016. In both subsequent quarters, Samsung identified memory chip sales as the major contributor to its financial problems .
"Weaknesses and price declines in the memory chip market persisted as the effect of inventory adjustments from large data center customers continued in the previous quarters, despite limited demand," Samsung said in a statement on Tuesday.
Tuesday's results mark the third consecutive quarter of this year's decline for the Korean company.
Samsung would have seen an even lower figure for Q2 if not for a lump sum payment from Apple. The iPhone maker reimbursed the Korean technology giant an estimated $ 800 billion won for unfilled OLED orders after negotiations to find an alternative contract solution failed.
Looking ahead, Samsung sees a way to return to profit growth in the coming months, but warns of general market volatility due to "increased external uncertainty." A number of factors put pressure on device manufacturers, from the US-China trade war to a stagnant smartphone industry.