Samsung's mobile woes drag on profit growth

Samsung Electronics on Tuesday reported a 0.1 percent dip in its second quarter net profit from a year earlier, blaming slower sales of smartphones and display panels for the drop.

In other segments of Samsung's business, the World Cup apparently helped strengthen demand for Samsung's premium QLED TVs, leading to higher profits from its consumer electronics division. Although it doesn't break out divisional revenues in fine detail, the company said its semiconductor business unit, responsible for DRAM and NAND flash, enjoyed strong results thanks to demand for its DRAM in data-center applications and NAND for high-capacity solid-state storage, even as prices for flash memory devices have begun to fall.

"Second quarter revenue fell due to softer sales of smartphones and display panels", Samsung said in a statement. Revenue was down 4% year-on-year, while operating profit rose 6% year-on-year.

Shipments in the smartphone market are declining after years of rapid growth, while China rivals such as Huawei Technologies Co. and Xiaomi Corp are grabbing more market share.

The big victor among divisions is the Semiconductor Business that delivered strong earnings.

Mobile, however, saw an operating profit of 2.67 trillion won and revenue of 24 trillion won.

Samsung shares fell less than 1 percent after the results.

U.S. detects new activity at North Korea factory that built ICBMs
The North Korea flag flutters next to concertina wire at the North Korean embassy in Kuala Lumpur, Malaysia, March 2017. It has in the past two years quickly advanced its nuclear programme.

The mobile business booked a 34 percent fall in operating profit to 2.7 trillion won (US$2.4 billion) in the second quarter, its biggest decline since the Galaxy S7 was Samsung's flagship model early previous year.

Operating profit was 14.87 trillion won, up 5.7 percent and in line with the estimate of 14.8 trillion won suggested in a preliminary guidance report released earlier this month.

The more interesting parts of the report are related to the future of Samsung's smartphones, which have been heavily hinted at.

Samsung said earlier this year that one of its biggest obstacles for business would be global protectionism, warning its employees to brace for potential implications.

Samsung last year announced 20 trillion won of new investments to increase chip output in South Korea and this year completed building the world's largest smartphone factory in India.

Sources say Vice Chairman Lee Jae-yong's recent visit to China may have also affected the firm's strategic change.

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