Samsung on Tuesday reported a 60-per-cent drop in profits in the first quarter of 2019, blaming weak demand for memory chips and displays.
Operating profit sank to 6.23 trillion won (5.35 billion dollars) from 15.64 trillion won a year earlier, the South Korean technology giant said, in line with previous profit warnings.
“First quarter earnings were weighed down by the weakness in memory chips and displays, although the newly launched Galaxy S10 smartphone logged solid sales,” the company said in a statement.
“Overall market demand for smartphones decreased quarter on quarter as the industry moved into a seasonally weak period, but Samsung reported a quarter-on-quarter rise in revenue thanks to solid sales of the Galaxy S10,” it added.
Profits at Samsung’s semi-conductor business, with which it makes by far the most money, fell by 64 per cent to 4.12 trillion won.
Despite strong sales of its Galaxy S10, the company’s mobile unit also posted a drop in profit of 40 per cent to 2.27 trillion won.
The news comes a week after the electronics giants delayed the roll-out of its Galaxy Fold – a foldable screen device – because of technical problems just days ahead of its official launch.
Priced at about 2,000 dollars, the phone has been billed as one of the smartphone market’s most innovative devices in years. But some reviewers found the devices had defective hinges and screens broke once the protective film had been removed.