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Samsung profits tumble when it warns of & # 39; challenges & # 39; forwards



  Samsung Electronics reported a 0.1 percent decline in net second-quarter profits from a year earlier on July 31, blaming slower global sales of premium smartphones that sparked demand for its flagship Galaxy device. Image copyright
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Samsung Electronics saw profits plummet in the second quarter as the key chip business faltered, and the company also warned of "challenges" ahead.

The world's largest smartphone and memory card manufacturer said operating profit fell 56% from a year earlier.

The results reflect a broader decline in industry, burdened by the US-China trade war.

The company is also facing a possible disruption in the chip business due to a trade row between Seoul and Tokyo.

The South Korean company reported operating profit of 6.6 trillion Koreans won ($ 5.6 billion; £ 4.6 billion) in the three months to June, a 56% decrease from 1

4.87 trillion Koreans was posted in the same period the year before. The result was in line with the company's estimates.

In a statement, Samsung said weakness and price declines in the memory chip market continued "despite a limited demand".

"The company faces challenges from uncertainty not only in business areas, but also from changes in the global macroeconomic environment," it states.

Japan recently imposed an export edge for certain industrial materials that Seoul needs to make semiconductors and display screens.

The move has raised concerns about the risk trade poses to global technology supplies, and could affect Samsung's future earnings.

The company also said it would focus on the launch of new products in the third quarter, including its first collapsible smartphone, which started a shaky start.

Samsung had to delay the launch of its new foldable smartphone earlier this year after reports of broken screens.

The shortcomings of the device proved to be a source of embarrassment to the company, which has had declining sales of smartphones and is facing increasing competition from rivals including China's Huawei.

Last week, Samsung said Galaxy Fold will go on sale in September after improvements were made to the smartphone.


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