Samsung Q2 earnings forecast shows the tech giant heading for a sharp decline in operating profit and revenue. The company attributes the drop to weak semiconductor sales, unexpected inventory write-downs, and growing trade uncertainties.
On Tuesday, Samsung released its earnings guidance for the April-June period. It estimated consolidated sales of 74 trillion won ($54.1 billion), nearly flat from last year. However, operating profit is expected to fall 55.9 percent year-on-year to 4.6 trillion won.
This performance falls far below market expectations. Analysts had predicted 76.2 trillion won in revenue and 6.2 trillion won in operating profit. These figures were based on estimates compiled by FnGuide, a local market research firm.
Samsung did not provide a business unit breakdown. However, the company stated that its Device Solution (DS) division experienced a sharp decline in profits. Inventory costs and tightened US restrictions on AI chip exports to China drove down earnings.
The chip business suffered further from inventory valuation losses. Samsung likely cleared out older high-bandwidth memory chips that failed to meet Nvidia’s latest standards. Some chips also became unsellable due to US export bans to China.
Samsung preemptively booked inventory losses during Q2 to reflect these risks. Meanwhile, its non-memory semiconductor business also likely posted losses. US export controls and weak demand contributed to the downturn.
“Improved HBM products are being evaluated and shipped to customers,” Samsung stated. The company expects losses to narrow in the second half as production utilization improves.
Analysts estimate DS Division profit likely fell below 1 trillion won.
“Samsung’s HBM sales missed expectations,” said Chae Min-sook of Korea Investment & Securities. “NAND prices fell, and the foundry business likely posted losses.” She added that the won-dollar rate drop since June also hurt earnings.
US tariffs and slowing consumer demand affected Samsung’s TV and electronics businesses. As a result, overall Q2 performance took another hit.
Looking ahead, Samsung’s third-quarter outlook remains uncertain. However, optimism surrounds the launch of its new foldables — the Galaxy Z Fold 7 and Flip 7 — set for Wednesday.
These smartphones feature Samsung’s in-house Exynos 2500 chip. The company hopes this launch will revive mobile earnings and boost the logic chip and foundry segments.
Samsung also unveiled a 3.91 trillion won share buyback plan. Of that, 2.81 trillion won will be canceled to raise shareholder value. The rest, 1.1 trillion won, will go to employee bonuses.
The company will release its full Q2 financial results on July 31. Those results will include net income and division-level performance details.
