Samsung's phone earnings nosedive but it'll still earn $11 billion
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A Samsung earnings preview spells wonderful news for the chip division and a so-so phone quarter, reports Reuters, as the electronics conglomerate managed to notch the highest profit for a June quarter since 2018.
Samsung's profit for Q2 likely hit $11.2 billion, as per a Refinitiv SmartEstimate from 24 analysts surveyed, riding on the wings of the semiconductor department as "lingering demand for its memory chips from server customers offsets lower sales to inflation-hit smartphone makers."
Thus, Samsung earned $7.5 billion from chip sales, and the rest from everything else, including phones. The mobile division has likely notched a 17% year-on-year decrease in Q2 as Samsung is reportedly sitting on a huge inventory of unsold phones.
Its phone business managed to bring in about $2 billion in profits, as rampant inflation and continuing geopolitical turmoil put a break on consumer spending and worsen their expectations for future earnings.
Samsung has likely shipped no more than 68 million phones in the June quarter, forecast the analysts, compared to 74 million in the first quarter of the year. Still, there are bright spots like the Galaxy S22 Ultra sales which have so far hit close to 11 million and whose margins have boosted overall profits in the division.
Samsung reports quarterly results on Thursday, when we'll see if the analysts' estimates here coincide with its own numbers, but Apple also didn't give guidance for Q2, citing unpredictable supply chain challenged. It will still notch much higher profit from its iPhone sales than the $2 billion or so that Samsung's mobile division was able to achieve this past quarter.
Apple's performance for the March quarter was a record $25 billion in profits and a big chunk of that came from the iPhone. Even if it goes through the inevitable summer sales slump, it is still likely to earn many times Samsung's phone department profits in Q2.
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