Samsung expects another big slump in profits
Apple and Huawei might prevent things from getting worse.
Samsung isn't about to leave the doldrums any time soon. The company warned that its profits were likely to slump in the second quarter, dropping about 56 percent year-over-year to roughly 6.5 trillion won (just short of $5.6 billion). That doesn't sound great, but it could have been worse -- a one-time payment from an unnamed customer buoyed Samsung's income. The company reportedly asked Apple for compensation after its OLED display orders didn't meet minimum levels, although that hasn't been confirmed.
While Samsung hasn't explained what dragged it down this quarter, its performance early in the year suffered primarily due to a drop in memory chip sales. While its increased profits over the first quarter suggest that the Galaxy S10 and A-series launches helped, they weren't popular enough to reverse trends.
The tech giant certainly faces a mixed summer. While the Galaxy Note 10 launch is right around the corner, the Galaxy Fold's redesign has yet to get a release date. It's also facing legal trouble in Australia and France over its advertising and labor practices. And then there's the simple matter of competitive pressure. Even with Huawei's troubles, Samsung still faces fierce rivalry from Chinese vendors and others that have historically hurt its sales.
