Samsung Electronics recorded a 7.3% profit increase YoY to $4.64 billion compared to $4.3 billion in Q2 2019. The company made a net profit of $4.08 billion in Q1 2020.
Revenues for the quarter fell by 6% YoY and 4% from the previous quarter to $44.3 billion, as a result of low sales in mobile phone and other devices. Nevertheless, cost-cutting initiatives helped secure profitability, as the electronics company cut spending on marketing and offline promotions.
According to its latest earnings release, the company recorded lower smartphone sales this quarter compared to last quarter as a result of store closures across the globe. Further, the demand for Samsung televisions fell in major regions due to lockdowns. Disruption of major sporting events like the Tokyo Olympics also hurt demand for TVs. Yet, the company improved YoY revenues from televisions by focusing on premium products like the QLED, as well as leveraging online sales.
While low mobile sales across the board drove down demand in its chips business, remote services boosted sales for memory “DRAM” chips used for data centres to enhance remote working online learning.
Samsung’s Outlook for 2020 H2
The electronics maker expects demand for mobile and graphics to recover in the rest of the year, as a result of launches of new phones, which will improve its semiconductor business. The company also expects uncertainty in its memory business due to high inventory levels among its service customers.
Samsung will improve profitability in its mobile business by expanding into new markets. It will also focus on customer cost needs amid the pandemic, launching low and mid-priced phones which will drive revenue for the second half. Samsung will also enhance its product portfolio by launching the Note and fold flagship models in August.
The company will maximize efficiency through cost and inventory management to maintain profitability in its consumer electronics division.