Samsung downgrades Q2 projected earnings as S6 performance disappoints
South Korean behemoth faces seventh straight quarter of year-on-year decline
South Korea's Samsung Electronics yesterday warned investors to brace for bad news in second-quarter earnings, as the smartphone giant made a downward adjustment to previous projections.
The company has seen dramatic shrinkage in its growth in the past year. The latest announcement follows relative market apathy towards its Galaxy S6 range, which also suffered from supply problems in meeting the demand for the S6 edge.
Samsung said in an official filing that its Q2 operating profit may have fallen as much as 4%, year on year to KRW6.9trn ($6.13bn). The figure represents the company's highest profit in four quarters but is still its seventh straight quarter of year-on-year decline.
A Reuters poll of analysts had yielded an average forecast for the quarter of KRW7.2trn.
"It doesn't matter how competitive you are if overall demand is weak," Reuters quoted HMC Investment analyst Greg Roh as saying. "Third-quarter earnings will likely be similar to the second quarter."
Samsung's woes stem not only from mismatched supply for the edge units, but from an economic slowdown in China, the world's largest smartphone market. Meanwhile, arch-rival Apple launched a well-received iPhone 6 range and usurped Samsung's position as smartphone market leader in Q4.