“Samsung Electronics Co. said Thursday its net profit fell for the first time in nearly three years in the second quarter on weaker-than-expected smartphone sales,” Min-Jeong Lee reports for The Wall Street Journal.

“The world’s biggest mobile-phone maker by shipments said in a statement that net profit fell 19.6% from a year earlier due to mismanagement of inventory, stiff competition and a recent spike in the local currency that made its products less competitive overseas,” Lee reports. “Operating profit at its mobile division—its biggest profit generator—fell 30% as the company faced more competition from Apple Inc. and a flurry of low-cost Android phone makers.”

“The company said the second half “will remain a challenge”, as profitability in its mobile unit may suffer due to a heated race over price and products,” Lee reports. “The decline comes ahead of the highly-anticipated launch of big-screen iPhones in the second half, which is expected to challenge Samsung… Samsung said operating profit slid 24.6% from a year earlier to 7.19 trillion won, as the company’s core mobile unit was hit by bigger-than-expected inventories for its smartphones in the mid-to-low-end segment.”

Lee reports, “Operating margin from the division fell to 15.5% from 17.7% a year earlier, reflecting the company’s hefty spending on marketing to clear out excess inventory. Samsung didn’t disclose how many smartphones it sold…”

Read more in the full article here.

MacDailyNews Take: Gee, that’s too bad. (pops cork!)

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