Samsung Elec flags 96% drop in Q2 profit as chip glut drags on

Samsung Electronics Co Ltd (005930.KS) reported a likely 96% plunge in second-quarter operating profit on Friday, largely in line with forecasts, as an ongoing chip glut drives large losses in the tech giant’s key business despite a supply cut.

The world’s largest memory chip and smartphone maker estimated its operating profit fell to 600 billion won ($459 million) in April to June, from 14.1 trillion won a year earlier in a short preliminary earnings statement.

It would be Samsung’s lowest profit for any quarter since a 590 billion won profit in the first quarter of 2009, according to company data.

The profit was largely in line with a 555 billion won Refinitiv SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate.

Shares in Samsung fell 1.4% in early morning trade, underperforming a 0.6% drop in the wider market (.KS11).

Samsung is due to release detailed earnings on July 27.

This report’s information was first seen on REUTERS; to read more, click this link.