KOREAN TECH GIANT Samsung has posted record profits for the fourth quarter in a row but warned investors of challenges ahead due to 'stagnant' smartphone sales and its weakening display business.
The firm said on Wednesday (PDF) that it saw net profits of 11.7tn won (around £7.7bn) during January and March 2018, up 52 per cent from the year-ago quarter.
These soaring profits can be largely credited to the firm's booming memory chip business, which accounted for 73 per cent of its first-quarter operating profits and recently saw the firm surpass Intel as the world's largest semiconductor company by revenue.
Samsung's profits also got a boost from its flagship Galaxy S9 and S9+ smartphones, which arrived on shelves in mid-March.
However, Samsung has warned of tougher times ahead in the mobile market, and said it expects second-quarter profits to decline sequentially "due to stagnant sales of flagship models amid weak demand and an increase in marketing expenses."
The firm is no doubt expecting things to improve into the third quarter, as Samsung confirmed on Wednesday that it'll be launching a new flagship model - presumably the Galaxy Note 9 - in the second half of the year.
Samsung also warned that its display business, which supplies OLED screens for the iPhone X, will weaken going forward, news which comes just days after Apple suppliers revealed that demand for the £999 smartphone has "plummeted" this quarter.
"Generating overall earnings growth across the company will be a challenge due to weakness in the display panel segment and a decline in profitability in the mobile business amid rising competition in the high-end segment," Samsung said.
Still, the firm remains upbeat about its memory chip business going forward, and noted that the "overall business outlook for the second half regarding components is positive", especially the DRAM chips used in servers, graphics cards and data centre infrastructure.
"Demand for server and mobile DRAM is expected to be robust and orders for high-density storage chips will grow", the firm said. µ
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