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.”
