Samsung Electronics' CFO, Lee Sang Hoon expects the company's earnings for second quarter to be “not that good,” a statement that was later confirmed by the Korean media. Samsung is expected to post an operating profit of 8.4 trillion won ($8.2 billion) for the second quarter of 2014. In comparison, Samsung reported record operating profit of 10.2 trillion won for Q3 2013. According to analysts, weak smartphones sales are said to be the main reason for lower earnings.
Sales of Samsung smartphones were squeezed from 87.5 million units to 78 million units due to strong iPhone sales in the high-end segment and inexpensive smartphones from Chinese brands in the budget segment, though strong sales of the Galaxy S5 reportedly limited further downfall. Jin Sung Hae, an analyst at KTB Investment & Securities stated “The main reason behind the lowered earnings estimate largely stemmed from weak smartphone sales. Strengthening competitiveness of local players in emerging markets are hurting sales of Samsung’s lower-end smartphones.”
Samsung is trying to reduce their reliance on mobile phones and tablets by focusing on luxury televisions and memory chips. Samsung is expected to reveal the actual numbers as soon as next week.
