Samsung announces disappointing Q2 earnings

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Samsung have announced that although they still expect to make a profit of $7.1 billion after a revenue of only $51.5 billion, this will be lower than expected.

In an unusual step Samsung have released a whole page of Q2 reference material in an effort to reassure the stock market that although the results are disappointing the company isn’t having any difficulties at the moment. The reasons given for the drop in sales are given as:

  • Increase in phablet sales eating into tablet sales.
  • Consumers don’t replace tablets as often as they phones.
  • An increase in marketing spend due to oversaturation of the low and mid end of the market, partly from Samsung themselves.
  • The Korean Won being very strong in the currency market.
  • Weaker sales in China due to seasonal drop and consumers saving for the 4G rollout.

So whilst $7.1 billion is still nothing to be sniffed at, it is a 24% drop compared to the same quarter last year. However they believe this is just a temporary blip:

(Samsung) cautiously expects a more positive outlook in the third quarter with the coming release of its new smartphone lineup.