Hong Kong (CNN Business)Samsung stock dropped on Wednesday after the world’s biggest smartphone maker reported a 56% fall in its operating profit for the second quarter, citing price declines in its memory chip business.
Shares in Samsung Electronics Co Ltd (SSNLF) tumbled as much as 3.3% in Seoul following the announcement.Operating profit was 6.6 trillion Korean won ($5.6 billion) for the three-month period that ended June, compared with 14.87 trillion Korean won the same period a year ago, Samsung said in a statement on Wednesday.Revenue also dropped 4% year on year to 16.09 trillion Korean won during the same period.”The weakness and price declines in the memory chip market persisted as effects of inventory adjustments by major datacenter customers in the previous quarters continued, despite a limited recovery in demand,” the company said.Read MoreIn the previous quarter, the company also posted a 60% drop in operating profit on falling chip prices and a weak display business.Samsung said it expects troubles in the memory business to continue for the rest of 2019 as the global economy comes under pressure.”In the second half, demand is expected to grow although the company sees volatility in the overall industry due to increased external uncertainties,” it said.The company’s core semiconductor business reported an operating profit of 3.4 trillion Korean won for the second quarter, down 71% from a year earlier. The segment’s revenue also dropped 27% to 16.09 trillion Korean won during the same period. Demand for smartphones has also declined because of economic uncertainty, Samsung said. Sales of the company’s flagship devices such as the Galaxy S10 fell because of slowing demand for premium products, while sales of the cheaper Galaxy A Series have increased, it added.