Samsung suffers fifth straight drop in quarterly earnings

Samsung suffers fifth straight drop in quarterly earnings

PanARMENIAN.Net - Samsung Electronics suffered a fifth straight drop in quarterly earnings as the Galaxy S6 failed to reverse its declining fortunes in global smartphone sales, the Associated Press reports.

The company's overall earnings drop during the April-June quarter was 8 percent but it reported a much bigger decline of 38 percent in the mobile division's income. The sharp profit drop in the mobile business came despite its ambitious start to the quarter with the launch of two flagship smartphones: the Galaxy S6 and the S6 Edge featuring a curved side display.

"Total sales of the S6 and S6 Edge during the second quarter were below expectations," Park Jinyoung, a vice president at Samsung's mobile communications team, said on a conference call Thursday, July 30.

The decline in the mobile profit was smaller than the previous quarter's nearly 60 percent plunge, but it extended the mobile division's losing streak. Samsung's sky-high growth in the smartphone industry came to a sudden stop in 2013 as bigger iPhone models lured buyers from Samsung phones and Chinese phone makers squeezed its sales in China.

Samsung's April-June net income was 5.8 trillion won ($5 billion), down 8 percent from 6.3 trillion won a year earlier. A FactSet survey of analysts predicted 5.6 trillion won of net income.

Sales fell 7 percent over a year earlier to 48.5 trillion won while operating income dropped 4 percent to 6.9 trillion won, in line with its earnings preview earlier this month. It generated 2.8 trillion won operating income from the mobile business compared with 4.4 trillion won a year earlier.

Market research firm IDC said Samsung, still the world's largest maker of smartphones, was the only top five smartphone vendor that lost market share during the second quarter, falling to 22 percent, from 25 percent a year earlier.

Samsung executives did not give many details about whether the company would tweak its mobile strategies. Their response during the earnings conference call was to "innovate the hardware to lead the market in the premium segment" and to "continue to add services."

The company is scheduled to hold an event on Aug 13 in New York city, bringing forward its usual product launch schedule by one month. It is widely expected to announce two new mobile devices. Samsung has held the new product launch in September in previous years.

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