Samsung forecasts dip in Q2 2018 profits following weak smartphone sales

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Samsung announced record earnings for four straight quarters, but that streak is about to come to an end. In its Q2 2018 earnings guidance (opens in new tab), Samsung is forecasting an operating profit of $13.2 billion (14.8 trillion won), up 5% from the same period a year ago.

Overall revenue at $51.7 billion (58 trillion won) is less than the $54.8 billion the company raked in last year. To put things into context, Samsung made a profit of $14.6 billion on revenues of $56.5 billion last quarter.

As noted by The Wall Street Journal, Samsung's profits over the course of the last year were bouyed by strong perfromance by the manufacturer's semiconductor division, which overtook Intel last year. Samsung may not be able to maintain its edge in this category, however, as NAND and DRAM module prices are expected to fall by up to 15%.

Slow sales of the Galaxy S9 series is attributed as a reason for the decline in revenue, with the company estimated to ship 31 million units this year. To compound matters, it looks like Apple is siding with LG as the display vendor for the upcoming iPhone to reduce its reliance on Samsung, and that has a potential to hurt Samsung's display business.

Harish Jonnalagadda
Harish Jonnalagadda

Harish Jonnalagadda is a Senior Editor overseeing Asia at Android Central. He leads the site's coverage of Chinese phone brands, contributing to reviews, features, and buying guides. He also writes about storage servers, audio products, and the semiconductor industry. Contact him on Twitter at @chunkynerd.
28 Comments
  • Poor sales. Hmm, maybe, just maybe it is because Samsung following Apple set the price to high for you actually getting...
  • Value for money is probably the last thing that I think of when I think of my Apple products... they are cool.
    Especially my newest gear like my MacBook Pro.
    Something I have always said and thought about Samsung and others is the sheer number of variations that overlap. All great offerings but way too many.
  • Apple counts on people like you who don't care about value for money. That's why all their next phones are going to be priced at record highs.
  • Hmmm... Maybe it's because Apple set their prices too high and Samsung gives you quality and variety for your money. The reason that Samsung sales are slow is because they're not doing enough to differentiate themselves from model to model. People have less reasons to upgrade right now than they did 2 or 3 years ago because incremental updates mean incremental sales. Had they done what they should have done (at the very least) this year with the note 9 and put in in display fingerprint scanner. Doing that would increase sales exponentially but since they're waiting until the S10 in order to increase sales of the S10 we won't see high sales until then I am sure. Incremental upgrades being incremental sales. Keeping the headphone jack is a huge plus, but giving us the ir blaster back, a bigger screen- 6.5 minimum for the Note 9 making ALL Note 9 models with 128gb minimum, 8gb ram... that would translate to sales for the Note series at least.
  • Well, the S8 had more (imo) that just incremental upgrades over the s7. Unless Im mistaken on what you call incremental. Having owned an S7, I really saw quite a bit of difference between the two. And still, apparently the S8 sold less than the S7. And as far as putting a fingerprint scanner under the screen, I dont think the technology was good enough back then. Sure theres 1 or 2 phones that have them now, but the tests show that they dont really perform well (speed, especially). And as much as Samsung is known to often include gimmicks that dont really work perfectly in the flagships, maybe screwing up this one would have been too detrimental.
  • Their sales would never go up ‘exponentially ‘.
  • What comes as a surprise to me here is that the s8 apparently sold less than the S7, considering the noticeable changes between the 2. I didnt own one, but I would have if timing had played right (I had purchased an S7 about 4 months before the S8 came along). What's not really surprising is that s9 thing. Not mentioning the iPhone X here, other Android brands have putting some very solid competitors (Huawei, OnePlus, obviously the Pixel 2, etc.). Samsung just presented us with minor upgrades over the S8 that probably didnt entice people that much. I dont know about other countries, but here in the UK they're running massive ad campaigns on that dual aperture feature. Yeah. Doesnt really do much.
  • smartphone market is saturated and other OEMs make cheaper phones with better qualities than Sammy... they should stop selling expensive mobiles that offer so little
  • cheaper phones with better quality? Really
  • Smartphone replacement cycle of one year is DONE. Two year cycle will be soon be done, as well. Sales numbers are driven primarily by this. Apple tried a work-around with throttling. My two year old Pixel is great. Might even go three years with it!
  • This. I've always kept my phones for at least 2 years. Not sure why people enjoy wasting their money every year, or even twice a year. Much better things to invest your money in
  • That’s not why Apple throttled their older phones.
  • Hmm, maybe lower your prices, get rid of the bloat and actually keeps security and software up to date? OK the last two are nerd things the masses don't care about but lowering the price of the phones appeals to all buyers.
  • The lack of S9 promos is a factor as well. Samsung seems to think that this phone will sell itself. The S7/S8 promos were much better.
  • Maybe Sampoop will think about getting rid of their disgusting bloatware and UI with their slow sales
  • Nothing to do with the software, it is primarily that the S9 and plus looks exactly like the S8 /S8+ with little to differentiate getting the newer model.
  • And that too.
  • And always better than the pixel with its plain unexciting software. You must have a fetish with poop, cause you are always spitting poop out your mouth when describing something other than a pos pixel...
  • Your Sampoop's the POS with it's ugly bloated software that lags not Pixel now quit trolling me, I don't fancy you
  • My S8 doesn't lag. But then again, I bought it new and not second hand like your pixel.......
    #poopixel
  • Samsung (and Android phones to a larger extent) don't have the desirability that iPhones do, so a lot of Chinese phones with good quality and cheaper prices are being picked up over Samsung's flagship offerings, whereas Apple retains their customers. Android phones are pretty much interchangeable, and you get a little number of die-hard Android brand loyalists. It's a tough situation for Samsung. Do you drop the prices to compete with the alternative Chinese phones and pick up sales or retain your premium priced status and continue to lose sales. I don't know how Samsung or any android phone builds a brand that competes with Apple.
  • I don't understand why iPhones are so desired, they're limited, locked down and overpriced (same with Samsung and their awful and bloated software), I used to be brainwashed by Apple but finally woke up to their bullsh*t and left and being back with Android (Pixel 2 XL) I couldn't be more happier oh and you do realise that Android controls over 80% of the global market so iPhones aren't as desirable as you think they are and proving that most people prefer Android, only with the iSheep.
  • You don't understand anything due to lack of common sense. If you have been brainwashed, that's proof there you have no common sense.
    And now the poop and sh;t comes flying out your mouth again.
    Calm your fetish......... Now please go back to sleep so us normal people can read responses without the pixel poop fetish freak butting in with their nonstop pos pixel drama. Oh and fyi, you do realize how many android phone manufacturers there are compared to "ONE" manufacturer of iPhones.
  • Please go back to kissing Sampoop's ass I understand perfectly that it's iPhone Vs every other Android OEM. Now quit trolling me and go back to sucking Sampoop's d*ck, and keep your mouth shut and I don't wanna hear anymore 💩 that comes out of your mouth Pixel rules Sampoop's a POS end of .
  • I'm correcting you, not trolling.
    There's a difference.
    #poopixel
  • Your trolling me no go away along with your Sampoop. #teampixel.
  • Samsung will probably continue to keep their prices high for a while. They have reached that level and are making a lot of money on it. The sold volumes might be lower but they seem to be making more money still. No Android OEM can reach Apple's iPhone business (at least for a while) because of being the only iOS device manufacturer. On the other hand Samsung is so far ahead of the other Android OEMs in the premium device space in terms sales and even more in terms money they make.
  • I see Google eventually challenging Samsung as they're the only with deep pockets that can. But Goodie must improve their marketing of the Pixel. I have faith that the Pixel has a bright future ahead.