Operating profit grew just 1% from the March quarter to 2.7 trillion won.
Advertisement
Samsung Electronics Co. missed analysts’ estimates of its second-quarter profit after the disappointing sales figure of its flagship smartphone, Samsung Galaxy S6, according to a report by Bloomberg.
Samsung is slashing the price of Samsung Galaxy S6 and the S6 Edge as mobile phone sales decline, tech magazine Wired reported on Thursday.
Samsung tried to smooth over the tough operating conditions in the smartphone market by saying the overall drop in smartphone shipments was due to declining shipments of older middle-to-low end models. Increasing prices won’t help in this situation, so the only way for them to go is down – and that means that users can look forward to price cuts on the company’s Android flagships in the near future. Today Samsung’s final Quarterly results came in confirming their poor mobile sales.
The company’s components division was the one growth area in the quarter, with revenues up to KRW 17.87 trillion from KRW 16.23 trillion a year ago.
At a separate board meeting, Samsung also doubled interim dividend to 1,000 won per share. It is believed that the company’s pains are the result of Apple, which launched several larger iPhone models, luring customers away from Samsung.
Samsung this week announced it would hold a “Galaxy Unpacked” event on August. 13, with the company due to unveil its next Note device and a larger S6 Edge.
Semiconductors, in particular, saw operating profit surge in the second quarter by 83% from a year earlier to 3.4 trillion won. But new iPhones in September would limit Samsung’s third-quarter sales growth, analysts said.
In an effort to see off smaller rivals nipping at its heels in emerging markets, Samsung slimmed down its line of low- and mid-range smartphones last year, and ramped up production of those that remained in a higher-volume, lower-price strategy. It was up 15.36 percent from the prior quarter, but down 4.03 percent from a year earlier.
Advertisement
Samsung said it benefited from strong semiconductor demand in the mobile and server markets and it expects this to continue in the rest of the year.
