Samsung Electronics Posts Disappointing Q2, 2015 Results

Leading consumer electronics maker Samsung has released its second quarter earnings report, which missed analyst estimates, but was largely in line with the company's own guidance, issued earlier this month. The less-than-impressive earnings are said to be mostly due to the lack of traction for its Galaxy S6 sales worldwide in the face of weakening global demand, and the continuing loss of market share for the company's mobile division in emerging markets, mostly to newer Chinese rivals. The company's net income in the three month period from April - June fell for the fifth successive quarter to 5.63 trillion won ($4.9 billion), while its operating profit fell 4 percent to 6.9 trillion won ($5.9 billion). The company's mobile business generated an operating profit of 2.76 trillion won ($2.36 billion), which was a decline of almost 40 percent YoY from 4.42 trillion won ($3.78 billion) a year earlier.

The company's semiconductor business however, has been reported to have performed significantly better, as it disclosed an operating profit of 3.40 trillion won ($2.91) for the quarter, which is up over 80 percent YoY from 1.86 trillion Won ($1.59 billion) a year earlier. On the back of expected strong growth in in its semiconductor business, Samsung is expected to report higher annual profit overall in 2015 than it did last year, when the company posted its lowest earnings since its smartphone business started blowing up at the beginning of this decade. A poll of 48 analysts conducted by Thomson Reuters I/B/E/S in the lead up to the company's Q2 earnings call, yielded an average profit estimate of 27.3 trillion won ($23.5 billion) for the full year 2015, although many have since, lowered their estimates. Following the posting of its results, the company doubled its interim dividend payout to 1,000 Won per common share in an apparent attempt to improve investor sentiment. The company also announced price-cuts for its flagship Galaxy S6 models in an attempt to boost sales.

Samsung continues to present a relatively bleak outlook for the second half of the calendar year, and has issued a statement to the effect, saying, "While 2H 2015 is expected to present mounting challenges, the company will try to improve earnings". Among various issues plaguing the Suwon, South Korea-based tech giant in recent times, at least one relates to supply chain constraints, which have prevented the company from meeting demand for its curved-screen Galaxy S6 Edge, which is thought to be one of the myriad reasons for the continued lackluster performance of the firm. Samsung however has said that it has managed to rectify its supply chain issues, and is reportedly considering preponing the launch of it next generation Galaxy Note phablet, the Galaxy Note 5, in order to offset the relative lack of demand for the Galaxy S6.

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About the Author

Kishalaya Kundu

Senior Staff Writer
I've always been a tech buff and have been building my own PCs since as far back as I can remember. My first computer was a home-built desktop running MS-DOS on which I learnt to program in GW-BASIC and my interests apart from technology include automobiles and sports.
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