Samsung’s Galaxy Note 10 Sales Limit Projected Profit Falls

As Samsung Electronics moves forward with the rollout of its 5G phones and $2,000 foldable handsets amid intensifying competition with Huawei and Apple, strong smartphone sales are raising hopes of a turnaround for the firm. Formidable sales of the Galaxy Note 10 series are limiting projected profit falls at the company — and bringing about hopes that the company is returning to a growth track, Reuters reported.

Samsung said it sold over 1 million of the 5G Note 10 handsets in South Korea, according to the report. That made it the firm’s quickest selling flagship model at home, with strong sales in Europe as well. At the same time, analysts credit Samsung with getting a boost from U.S. sanctions on Huawei, which, in essence, prevents U.S. companies from supplying the firm. 

There are reportedly early signs that an important driver of Samsung’s profit, the global memory chip business, will stabilize in 2020 after slower spending by pivotal data center customers and a weak global economy eroded prices. 

Samsung said per the report before its full earnings later in the month that July to September quarter operating profit would probably fall 56 percent to $6.44 billion or 7.7 trillion won — a bit above the Refinitiv SmartEstimate forecast of 7.1 trillion won. The company also flagged a revenue fall to 62 trillion won of 5.3 percent. 

Then news comes as smartphone shipments for Samsung increased in the second quarter of 2019 thanks to retail sales of its mid-level models. Sales of the flagship Galaxy S10 declined year over year in the second quarter, however, leading to a 42 percent drop in profit compared to the same period in the prior year, although revenue for Samsung’s mobile division increased 8 percent.

Samsung’s earnings provided a glimpse into the intersection of retail as well as mobile. For the second quarter, the firm reported an overall 4 percent year-over-year revenue decline, to about $47.4 billion (56.13 trillion won).