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Samsung’s Q2 Operating Profits Below Expectations

July 6, 2015 - Written By Justin Diaz

Samsung Electronics Co., the company behind the ever-popular Galaxy S series of devices in the mobile space once reigned king over all other OEMs when it came to devices. While they are by no means doing shabby when compared to other brands, there’s no disputing that they certainly aren’t recording operating profits and the kind of huge sales numbers they were used to just a few years ago. Just this morning A number of analysts predicted what they thought might be Samsung Electronics Co.’s second-quarter operating profits which spans from April to June, a number which was thought to be around 7.2 trillion won.

Now, it seems Samsung is recording second quarter operating profits of 6.9 trillion won which is lower than what analysts were expecting, which displays Samsung didn’t do as well as they likely hoped. 6.9 trillion won translates to roughly around $6.13 billion in USD, a result which is likely influenced to some degree by their loss in market share and profits for the Chinese region where smartphone sales were down 53% from the same time in 2014. Samsung’s struggle to keep up and increase their smartphone sales while also taking back market share is faced with opposition from other companies who are beating Samsung at their own game. Typically, Samsung has done well by offering a wide range of products in all tiers, with low-end, mid-range, high-end smartphones, covering all their bases of the market. It has been increasingly difficult for Samsung to keep pace with previous years however now with rising sales of the new iPhones in the Chinese region seizing profits from high-end buyers.

Companies like Xiaomi, Meizu and Huawei are grabbing up swarms of customers from the low tier, almost blocking Samsung out from either group of consumers. Some investors are also concerned that Samsung’s shortage of supplies for the flagship Galaxy S6 handset could be affecting sales of the Galaxy S6 overall, another factor which could play a part in Samsung’s lower operating profits from the second quarter compared to this time last year. With the launch of the Galaxy S6 earlier this Spring Samsung is back in a better position than they were in the first quarter of 2015, but sales weren’t enough to bring them to a state of positive profit growth.