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Samsung Q220 Earnings Report—Conservative on Displays, Mobile Phones and TVs
August 02, 2020
Samsung Electronics reported sales of 52.97t won ($44.54b US), down 4.3% sequentially and down 5.6% Y/Y with stronger memory sales, and weaker smartphone sales. Operating profit increased on better memory profitability, season appliance strength, and a one-off payment from Apple (AAPL) in the display segment.
Focusing on the displays, smartphones and TVs
Samsung’s stance on 2H and 3Q particularly, was conservative. Little change in plans seems to be the norm with seasonality in a number of their businesses being the growth driver while virus related delays or secondary outbreaks the limiting factor.
August 02, 2020
Samsung Electronics reported sales of 52.97t won ($44.54b US), down 4.3% sequentially and down 5.6% Y/Y with stronger memory sales, and weaker smartphone sales. Operating profit increased on better memory profitability, season appliance strength, and a one-off payment from Apple (AAPL) in the display segment.
Focusing on the displays, smartphones and TVs
- Display business, particularly smartphones, was unusual in that the company expects improvement in 4Q rather than 3Q as they see 3Q customer releases as ‘mass market, low margin smartphones. 4Q profitability in smartphone displays is expected to improve, which assumes a shift toward higher margin premium smartphones, Little was said about the large panel business as Samsung Display is drastically reducing its production in that segment and will not be introducing volume production of QD/OLED TVs until next year, although Samsung Electronics itself will continue to base its TV business on LCD technology.
- Samsung Mobile expects a gradual recovery in smartphones after a disastrous 1H'20, where it fell behind Huawei. Samsung expects competition to increase which seemed to be a warning that profitability might not improve quite as quickly as originally expected in 3Q, although the unit was profitable in 2Q on lower marketing costs. Samsung’s own brands should help the mobile hardware side to improve in 3Q but again they warned that the impact of the COVID-19 virus is an unknown that could change mobile usage on both a short-term and long-term basis. 5G implementation delays were mentioned but their impact on 2H was not.
- TV guidance was virtually non-existent a surprising reaction to the uptick in TV sales globally.
Samsung’s stance on 2H and 3Q particularly, was conservative. Little change in plans seems to be the norm with seasonality in a number of their businesses being the growth driver while virus related delays or secondary outbreaks the limiting factor.
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Barry Young
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