Samsung Electronics Co suffered a fifth straight drop in quarterly earnings as the Galaxy S6 failed to reverse its declining fortunes in global smartphone sales.
The company’s overall earnings drop during the second quarter was 8 percent, but it reported a much bigger decline of 38 percent in the mobile division’s income.
“Total sales of the S6 and S6 Edge during the second quarter were below expectations,” Samsung’s mobile communications team vice president Park Jin-young said on a conference call yesterday.
The decline in mobile profit was smaller than the previous quarter’s nearly 60 percent plunge, but it extended the mobile division’s losing streak.
Samsung’s net income in the second quarter was 5.8 trillion won (US$5 billion), down 8 percent from 6.3 trillion won the previous year.
A FactSet survey of analysts predicted 5.6 trillion won of net income.
Sales fell 7 percent year-on-year 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 the previous year.
The only bright spot came from sales of components powering smartphones. A robust performance at its semiconductor department helped narrow the overall profit decline. Operating income from its semiconductor division surpassed the 3 trillion won mark for the first time in several years.
Market research firm International Data Corp 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 the previous year.
Samsung was hit by two problems with its Galaxy S6 series. The regular version of the phone, the Galaxy S6, was not as popular as expected, while it could not keep up with demand for the S6 Edge model, which features a display that curves on both sides that is more difficult to produce.
Samsung executives did not give many details during the conference call about whether the company would tweak its mobile strategies.
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