Samsung Shares Fall Ahead of Q2 Earnings, Profit Expected to Drop Sharply

Samsung’s stock is falling, and fast. Just days before its Q2 earnings report, the tech giant saw a sharp dip in share price. This comes as no surprise to market watchers. Reports suggest that Samsung’s profit may take a major hit this quarter.

The numbers haven’t been released yet, but early estimates already hint at a big drop in earnings. Most of the slowdown is linked to falling demand for chips and smartphones, two of Samsung’s biggest revenue streams. We’ve seen this trend building up over recent months. Everyone is now focused on the upcoming earnings report.

Analyze the real story, Samsung’s stock movement, forecasted earnings, and the main cause of its profit decline. Let’s dive into the details.

Recent Share Performance

• On July 7, Samsung’s share price slid about 2.5%, while South Korea’s KOSPI index rose slightly.
• The decline reflects growing worries over chip demand and delayed HBM shipments. Samsung shares are still up nearly 19% year-to-date, but they lag behind KOSPI’s ~27% climb.

Earnings Forecast

• LSEG estimates Samsung’s Q2 operating profit at 6.3 trillion won (about $4.62 billion), down 39% from Q2 2024.
• This would be the weakest quarterly profit in six quarters.
• The drop mainly stems from missed shipment targets and weak demand for high-bandwidth memory (HBM) chips.

Semiconductor Business Challenges

• Samsung still ranks as the world’s top memory chip maker, but rivals like SK Hynix and Micron are earning more from AI chips.
• Samsung’s HBM3E chip has yet to receive Nvidia certification, delaying key revenues.
• U.S. trade restrictions on exports to China are still putting limits on Samsung’s sales.
• As a result, HBM revenue likely held steady, not rose, during Q2.

Smartphone and Consumer Electronics

• Samsung’s smartphone division is still doing well. Some sales were pulled in advance by customers expecting U.S. tariffs.
• This helped balance some of the chip division’s weak results. Smartphone profits rose in Q1, and early Q2 showed stable performance.

Display and Foundry Update

• In the first quarter, Samsung Display reported revenues amounting to 5.9 trillion won, alongside an operating profit of 0.5 trillion won.
• They expect to maintain foldable panel supply and improve large-display earnings.
• Their foundry unit is preparing 2 nm mass production in H2 2025, but this won’t contribute to Q2 numbers.

Macroeconomic & Industry Factors

• Samsung withdrew its own Q2 outlook earlier this year due to U.S.-China trade uncertainty.
• U.S. tariffs and tech export restrictions threaten both the memory chip and smartphone markets.
• The global chip industry is seeing strong AI-led demand, but supply-chain stress and trade tensions persist.

Conclusion

Samsung is likely to post its lowest operating profit in six quarters, estimated at 6.3 trillion won, down 39% from the same period last year. The main reason for delays in AI memory-chip shipments. Weak sales in this area are being partially made up by smartphone demand. Still, trade risks and tech restrictions weigh heavily across Samsung’s businesses. Q2 performance will be a key moment for the company’s 2025 outlook.

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Disclaimer:

This content is for informational purposes only and not financial advice. Always conduct your research.