Struggling Samsung’s profit falls for seventh consecutive quarter

“Samsung Electronics reported a seventh straight year-on-year fall in quarterly operating profit, reinforcing worries that sales of the new Galaxy S6 smartphone have fallen short of expectations,” Simon Mundy reports for The Financial Times.

“Samsung had put the Galaxy S6 at the heart of what it promised would be a comprehensive overhaul of its stuttering smartphone division, which suffered a sales decline of more than a fifth last year. Executives codenamed the device “Project Zero”, with a focus on improving the lacklustre reception for last year’s Galaxy S5,” Mundy reports. “Signs of disappointing sales since its April launch have prompted analysts to cut their forecasts of Samsung’s performance this year — scepticism that appeared to be vindicated on Tuesday by the company’s preliminary earnings guidance for the second quarter.”

“Samsung said it expected to report sales of Won48tn ($43bn) for the three months to the end of June. Operating profit was estimated at Won6.9tn — 4 per cent below the consensus estimate of analysts polled by Bloomberg — suggesting a repeat of the Won7.2tn earnings in the same period of last year,” Mundy reports. “Market feedback suggested that sales of the device in the reporting period were roughly in line with the 18m units sold by the Galaxy S5 in the second quarter of 2014, said Daniel Kim, an analyst at Macquarie. The decline in profits reflected weaker sales of other high-end products released last year, he added. One factor holding back demand for the new device has been the popularity of the rival iPhone 6, which spearheaded Apple’s sales of 61m smartphones in the first quarter of this year.”

Read more in the full article here.

MacDailyNews Take: Bad iPhone knockoffs are now failing to confuse the ignorati. Samsung’s one winning play is no longer working very well. 🙂

Thermonuclear
Thermonuclear.

SEE ALSO:
Investors lower Samsung expectations amid Galaxy S6 sales doubts – July 6, 2015
Lower than expected Galaxy S6 sales fail to drag struggling Samsung back into profitability – July 1, 2015
Apple’s indomitable iPhone 6/Plus sales unfazed by Samsung’s anemic Galaxy S6/Edge – June 2, 2015
iPhone 6, killer: Beleaguered Samsung’s Galaxy S6 sales are a total disaster – May 22, 2015
Beleaguered Samsung reports 30 percent decline in operating profit – April 28, 2015
Samsung Galaxy S6 phones suffer weaker than expected sales in South Korea homeland – April 22, 2015
15 percent of Samsung Electronics execs quit amid profit slump – April 2, 2015
Significant Android to iPhone switching weakens market for Samsung Galaxy S6 – March 24, 2015
Apple iPhone takes smartphone market share from Android around the world – March 4, 2015
Poor man’s iPhone: Android on the decline – February 26, 2015

19 Comments

    1. For the millionth time, ‘Karma’ is the Hindu belief that the sum of a person’s actions in this and previous states of existence decides their fate in future existences.
      Somehow it never applies when something bad happens to you or your loved ones, only those other people.

      1. It could be said Samsung’s ancestors were arguably even bigger shitheads than their decedents. So karma is the correct word when dealing with an entire genetic branch made up of pathetic, low-class thieving dickwads.

  1. ScamScum should keep doing their BOGO thing; or better yet, capture more market share with, ‘Get the first phone free, and two for the price of one.’

    At this point I don’t think even freebies will help, ScamScum phones will occupy shelf space, and fill warehouses. Going to be many unsold, headed for the landfills, phones. 🖖😀⌚️

  2. I’d hate to burs everyone’s bubble here, but Samsong is expected to generate $43 billion (with a B) in sales for this past quarter. That is more than 140 million phones at $350 each.

    As much as I’m enjoying Samsung’s steady decline, it is still very, very far from dead. At this point it is more like Microsoft, and at least five years away from being like Blackberry. And unlike Blackberry, which had its two-headed co-CEO monster deeply in the sand, Samsung clearly knows whom to copy in order to stay in the phone business.

    It is going to be one very very long decline.

    1. You’re correct that Samsung is far away from losing money. In terms of its mobile division alone I believe it is closer to the edge. The Microsoft analogy is good since M$ have cash cow product sectors that help it run other groups like Xbox and mobile devices at a loss.
      Samsung needs another emerging market to copy but apart from watches there isn’t anything interesting out there.

    2. The 43Billion is gross sales, not profit. Profit is less than 2Billion. Profits are shrinking. Their BOGO strategy cuts ScamScum profit. ScamScum reports SHIPPED phones, not phones SOLD. Many SHIPPED phones sit on shelves, and take up space in warehouses; no profit in that. 🖖😀⌚️

      1. Never mind profit; Samsung is still selling hundreds of millions of throw-away devices every year. And eventually, after sitting on some shelves, these devices eventually get sold. Of course, the profit margin is ridiculous and can’t compare, but the sheer volume of devices ending up in people’s hands is still a number to recon with.

        And this whole SHIPEED vs’ SOLD is a bit old. This isn’t the Atari 2600 E.T. game (where they ended up accepting returns on unsold cartridges and burying millions in a landfill). These phones may be sitting on the shelves a bit longer than iPhones, but they do all eventually end up in the hands of consumers, one way or another (i.e. coupons, deep discounts, BOGOF offers, etc). Reporting SHIPPED vs. SOLD doesn’t make that much of a difference in the overall picture, although it might make an artificial bump in a single quarter (and balance out over the next one).

        Most analysts say that within a month or two after launch, Samsung’s inventory for their flagship devices baloons to 10 – 12 weeks, compared to Apple’s 1 – 3 weeks for iOS devices in off-season (i.e. long after the initial launch of new models). It takes a lot of investment (promotion, price drops, advertising) to clear out that inventory and reduce it to more manageable 4 – 6 weeks, but it is far better than taking inventory back and writing it off (as BlackBerry did with their first tablet).

  3. I really think Samsung needs to change its advertising strategy. Stop mentioning Apple in every ad. All they are telling customers is that Apple is the competition and that Samsung is the next best thing.
    I think they need to grow a few and start standing by their products.

  4. Anyone know if there is any truth to the “supply shortage” which is being blamed by multiple media outlets as the reason sales numbers are so low? It seems a convenient excuse.

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