Samsung releases its 2018 Q4 financial report: net profit is 36% while glory days of mobile phone and memory are over

As the revenue warning released by Samsung, its sales fell off in Q4 of 2018. Quarterly revenue is $53 billion, net profit is about $7.6 billion with a 31% QoQ decline and a 36% YoY decline. Performance slump is mainly because slide of Samsung smart phone and memeory businesses. Operating profits of these two departments decline by about 30%, both dragging performance of Samsung and resulting in its 2018 annual revenue is $218 billion, which only increases by 1.7%.

According to official statistics of Samsung, up to December 31, 2018 in Q4, its total revenue reaches $53 billion. Total revenue is $58.5 billion in last quarter and $59 billion in the same period of last year, which has a 10.1% YoY decline and a 9.5% QoQ decline. Operating profit is $9.65 hundred million with a 28.7% YoY decline and a 38.5% QoQ decline. Net profit is $7.6 billion with a 31% QoQ decline and a 36% YoY decline.

Among Samsung sub-businesses, revenue of CE(Consumer Electronics) department is $10.5 billion with a 16% QoQ growth and a 6% YoY drop. Revenue of IM (Instant Messaging) service department with Galaxy mobile is $20.9 billion, of which smart phone revenue accounts for $19.8 billion with a 11% YoY decline and a 8% QoQ decline.

Revenue of DS(Device Solution) department is $24.8 billion, of which semiconductor accounts for $16.77 billion and memory revenue acounts for $1.4 billion with a 14% YoY decline and a 26% QoQ decline. Revenue of DP(Dispaly Panel) service department is $8.2 billion, which has a 18% YoY decline and a 9% QoQ decline.

Businesses of Samsung in whole Q4 decline except for CE(consumer electronics) department which increases, especially mobile and semiconductor service which account for largest part of revenue.

Among $9.7 hundred million operating profit, CE(Consumer Electronics) contributes $6 hundred million which increases compared with both last quarter and last year. IM(Instant Messaging ) service deparment only contributes $13.5 hundred million. It declines $8 hundred million compared with last year and declines $6.4 hundred million compared with last quarter, which are 37% YoY decline and 32% QoQ decline, respectively.

DS(Device Solutions) department takes largest part with 79% of revenue, of which semiconductor contributes $7 billion with a majority being memory. However, operating profits of semiconductor deparment decline by $2.8 billion compared with last year and $5.3 billion compared with last quarter, which are 28.8% YoY decline and 43% QoQ decline, respectively.

Although Samsung doesn’t release detailed data of this part, DRAM chips price drop has a biggest impact. Samsung keeps a 70% gross margin in DRAM beyond normal level. However, memory prices dropped in Q4 of last year. ASP average price declines by 11% according to imformation released by SK Hynix earlier, which will have a great impact on revenue of Samsung, the world’s largest DRAM supplier.