(MENAFN - Baystreet.ca) Samsung Electronics (KRX:SSNLF) said Friday that profits for the three months that ended June more than halved from a year earlier following continued weakness in the price and demand of memory chips.
The world's largest smartphone maker and supplier of memory chips said operating profit was at 6.5 trillion Korean won ($5.5 billion U.S.), which was slightly better than an industry estimate of six trillion won, but was down about 56% from a year earlier.
Memory components, which are used in mobile handsets and enterprise servers, comprise Samsung's main profit-making business.
Samsung said it saw one-off gains in the display business reflected in operating profits. Media reports were swirling that analysts said the smartphone giant received reimbursements worth about 800 billion won for display panels sold to Apple as the iPhone maker missed a sales target on which the two companies had agreed.
Experts have said that Samsung and other semiconductor companies are undergoing a period of inventory adjustment, which is keeping demand low and causing a supply glut that's squeezing the price. Some have predicted continued excess inventories in both DRAM and NAND memory chips, which would push back the sector's recovery to the second half of 2020.
In the three months that ended March, Samsung's profits fell about 60% on-year to 6.2 trillion Korean won ($5.3 billion U.S.).
Experts said the company's earnings will likely recover in the second half. Already, operating profit in the second quarter was slightly higher than first-quarter numbers.