Samsung reports 34% dip in Q4 profit despite strong smartphone sales

Samsung logo
Samsung logo (Image credit: Android Central)

What you need to know

  • Samsung reported revenues of KRW 59.9 trillion ($50.7 billion) in the fourth quarter of 2019, an increase of 1% over the same period a year earlier.
  • Operating profit, however, dipped 34% to KRW 7.1 trillion ($6 billion).
  • The company is hoping that stronger demand for 5G phones and OLED screens will allow it to boost profitability in 2020.

Amid continued uncertainties in the global business environment, Samsung Electronics has announced that its operating profit dropped 34% YoY to KRW 7.1 trillion ($6 billion) in Q4 2019. Quarterly revenue, however, increased by 1% to KRW 59.9 trillion ($50.7 billion). Samsung says the dip in operating profit was due to the continuous fall in memory chip prices globally, as well as weakness in demand for display panels.

Samsung's mobile division posted KRW 24.95 ($21.1 billion) in revenue and an operating profit of KRW 2.52 trillion ($2.13 billion) during the fourth quarter of 2019. Even though demand for both smartphones and tablets increased over the previous quarter, revenue fell as the effect from new flagship launches faded.

Due to low seasonal demand, Samsung expects demand for smartphones and tablets to decline in the first quarter of 2020. However, for the whole of 2020, the company expects demand for 5G smartphones to rise. It plans to expand its 5G product portfolio this year while increasing the competitiveness of its mass-market phones by adopting "innovative technologies." Samsung is also bullish about foldable phones and expects them to help boost the profitability of its mobile business this year.

Along with 5G and foldable phones, Samsung also expects demand for OLED screens and image sensors to grow this year. Even though the company expects profitability to improve in 2020, it sees uncertainties in the global business environment to continue.

Babu Mohan
News Writer