Samsung earnings falls as smartphone sales slow
Samsung Electronics Co has reported a bigger-than-expected fall in second quarter profit on Thursday and said it was unsure if earnings from its handset business would improve in the current quarter.
Samsung warned before this month that the second quarter would be its worst in two years as rapid growth in smartphone sales had gray. The company particularly struggled to compete in cheap smartphones, currently the fastest growing part of the global smartphone business. Samsung shares dived 4% in Seoul.
Its net income for the April-June quarter dropped 20% to 6.3 trillion won ($6.1 billion) from 7.8 trillion won a year earlier. That was the lowest since the second quarter of 2012. Analysts surveyed by FactSet forecast 6.5 trillion won income.
Sales fell 9% to 52.4 trillion won while operating profit sank 25% to 7.2 trillion won, in line with Samsung’s guidance earlier this month.
Robert Yi, head of investor relations, told a conference call that Samsung had higher marketing expenses as competition increased in mid- to low-end smartphones and because it tried to clear old inventory before the release of updated smartphone models in the fall. Tablet computer sales also fell, he said, citing weak overall demand.
Samsung sold 95 million mobile handsets in the quarter and smartphones were close to 80% of those sales, Yi said. It sold 8 million tablet PCs.
