The Q3 2019 earnings guidance is valid for the three-month period that ended in September. Based on this information, Samsung could face a 50-percent profit drop in Q3.
This does not mean Samsung will face loses, not at all. Samsung is a money-making machine at this point, and its profits are sky-high still, but are not growing as expected.
The company believes that it will post an operating profit of around 7.7 trillion Korean won ($6.44 billion). Just to be clear, this is considerably more than Samsung made in Q2 this year. At the same time, it’s also considerably less than in the same period last year.
Samsung is a look at a profit drop of 56% (YoY)
The company made 6.6 trillion won ($5.5 billion) in Q2 2019, while it made 17.57 trillion won ($14.7 billion) in Q3 2018. So, to be exact, Samsung could be on the way to a 56-percent profit drop year-on-year (YoY).
Samsung is expected to release its full earnings report soon, this is just an earnings guidance. We will have far more info once that happens, of course, but those numbers will be close to this one.
Samsung’s full earnings report will offer us a chance to take a closer look at various different parts of the company, though. We’ll be able to see how Samsung’s mobile sector is doing, its camera sensor segment, CPU business, and so on.
CNBC actually notes that if this guidance ends up being accurate, that it will be the third consecutive quarter where the company’s operating profit is halved (compared to the same period a year ago).
The company did warn this may happen
Truth be said, Samsung did warn something like this may happen. The company published an official warning before Q1 2019 earning guidance was released, just to prepare investors.
Back then, Samsung actually blamed plummeting chip prices and slower chip demand for such expectations. That makes sense, as the company’s chip business has been one of its main forms of income.
It will be interesting to see how the Galaxy Note 10 series did for the company thus far. The Galaxy Note 10 series was announced in August, and we may not see the full impact of its sales until Q4 2019, but it will still be interesting to see how it did.
Samsung may or may not mention the Galaxy Note 10 series in its full earnings report, though. The company usually talks about various different segments of its business, in general, but is not a stranger of mentioning well-selling flagship smartphones.