Slumping Galaxy sales lead to weak Samsung earnings

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Samsung galaxy
The Galaxy S9 isn't selling as well as expected.
Photo: Samsung

Despite releasing a series of iPhone-bashing commercials, Samsung’s own smartphone sales are beginning to decline drastically. And investors are not pleased.

Samsung posted a second-quarter earnings report Monday that put an end to its streak of record-breaking financial results. While the company’s memory chip business is doing well, sales of its flagship Galaxy S9 smartphone and display panels are slipping after the company saw huge profit growth in 2017.

Net income for Samsung came in at $9.8 billion, up 2 percent from the same quarter last year. However, analysts expected the company to post about $9.97 billion in income.

Samsung Galaxy S sales remain weak

The main culprit for Samsung’s lackluster results was handset sales. Samsung reported $2.39 billion in operating income for its handset division, down from $3.6 billion a year ago. The premium smartphone market has stagnated, causing the South Korean tech giant to spend more on marketing to peddle its phones.

If Samsung didn’t have its burgeoning chip business to boost up profits, the results could have been worse.

“The outlook for the memory chip business remains strong across all applications thanks to demand for server and PC memory as well as new mobile product launches,” Samsung said in a statement. “The mobile market condition will likely remain challenging in the second half amid pricing competition and new product launches.”

Samsung Galaxy Note 9 coming soon

Samsung is expected to launch its Galaxy Note 9 smartphone at an event on August 9. One of the biggest features could be better battery life than the iPhone. It will also supposedly include a 6.3-inch SuperAMOLED display, S Pen, headphone jack, Exynos 9810/Snapdragon 845 processors, and more.