Samsung Q2 Operating Profit Drops 30% to KRW 4.7 Trillion

Seoul, South Korea - Samsung Electronics Co Ltd reported second-quarter operating profit of KRW 4.7 trillion (US$3.4 billion), declining 30% from the previous quarter's KRW 6.7 trillion, the South Korean technology company said Thursday

Consolidated revenue fell 5.8% quarter-on-quarter to KRW 74.6 trillion (US$53.9 billion) for the three months ended June 30, though this represented a 1% increase from the same period last year.

Net profit dropped to KRW 5.1 trillion (US$3.7 billion) from KRW 8.2 trillion in the first quarter.

The company cited inventory value adjustments in memory operations and one-off costs related to export restrictions on China in non-memory businesses as factors affecting profitability.

Samsung's Device Solutions division, which encompasses semiconductors, reported revenue of KRW 27.9 trillion (approximately US$20.2 billion), a 11% increase from the previous quarter.

However, operating profit in the division fell to KRW 0.4 trillion (US$289 million) from KRW 1.1 trillion in the first quarter.

Within the division, memory operations expanded HBM3E sales and increased the proportion of high-density DDR5 products for server applications.

Server SSD sales increased as previously delayed datacenter projects resumed, leading to a significant reduction in NAND inventory levels.

The foundry business secured revenue growth, but earnings remained constrained due to inventory value adjustments stemming from US export restrictions on advanced AI chips to China and low utilization rates at mature production nodes.

Samsung's Device eXperience division reported revenue of KRW 43.6 trillion (US$31.5 billion), down 16% from the previous quarter.

Operating profit in the division declined to KRW 3.3 trillion from KRW 4.7 trillion in the first quarter.

Mobile operations shipped 58 million smartphones and 7 million tablets during the quarter, with an average smartphone selling price of US$270.

Smartphone shipments declined from the first quarter, which had benefited from the introduction of new flagship models.

Samsung Display Corporation recorded revenue of KRW 6.4 trillion (US$4.6 billion), representing a 9% increase from the previous quarter.

Operating profit remained flat at KRW 0.5 trillion. The unit benefited from new smartphone launches by major customers and expanded sales in information technology and automotive segments.

Currency movements affected results, with the strengthening Korean won against the US dollar reducing operating profit by approximately KRW 0.5 trillion compared to the previous quarter.

Capital expenditures totaled KRW 11.1 trillion (US$8.0 billion), with KRW 9.8 trillion allocated to the Device Solutions division and KRW 0.8 trillion to display operations.

The company's board approved a quarterly dividend of KRW 367 per share for common and preferred stock.

Samsung continues its KRW 10 trillion share repurchase program announced in November 2024, having acquired KRW 6.1 trillion worth of shares through May 2025.

Earnings per share for the quarter were KRW 737, down from KRW 1,192 in the previous quarter. Return on equity fell to 5% from 8% in the first quarter.

For the second half of 2025, Samsung stated that AI demand is expected to remain robust due to continued investments by major cloud service providers, which will support server demand for both DRAM and NAND products.

(US$ 1 = KRW 1,383)