Samsung posts disappointing earnings; revenue, profit down
Samsung released disappointing second-quarter earnings Thursday, reporting revenue that was down 7% year over year and profit that fell 8%, squeezed by competitors at both the high end and the low.
The South Korean electronics giant posted profit of 5.75 trillion won ($4.93 billion) on revenue of 48.54 trillion won ($41.7 billion), roughly in line with the South Korean company’s guidance.
The results underscore the continuing challenges that Samsung faces in the smartphone market.
SIGN UP for the free California Inc. business newsletter >>
At the high end, it has lost significant ground to Apple, which dominates with its iPhone line. But at the low end, cheaper smartphones made by Chinese manufacturers have also eaten away at Samsung’s share.
Although its Galaxy S6 and Galaxy S6 Edge have been praised by reviewers and users alike, the phones haven’t led to the big smartphone turnaround that analysts were looking for.
Samsung said its overall mobile revenue improved slightly in the second quarter compared with the first due to increased shipments of those two phones, but noted a drop in overall smartphone shipments caused by fewer shipments of its older middle- to low-end models.
“Although revenue increased, profits increased marginally [quarter over quarter], due to supply difficulties from higher-than-expected market demand for the Galaxy S6 Edge, as well as increased marketing expenditures that typically accompany flagship product launches,” Samsung said.
Samsung also warned that it is expecting a difficult rest of the year.
While [the second half of] 2015 is expected to present mounting challenges, the company will try to improve earnings,” Samsung said, noting that it expects growth in TV sales.
The company said its IT and mobile communications division “is expected to face a difficult business environment.”
However, the company will try to maintain sales momentum for its high-end phones by adjusting the price of the S6 and S6 Edge and introducing new premium smartphone models. It will also introduce new low-end and medium-priced models.
Twitter: @byandreachang
ALSO:
Uber tests car leasing program for drivers
Charter cable deal target Time Warner Cable adds customers
