Samsung has joined Apple, Blackberry and HTC in disappointing investors with earnings which were below expectations.
Samsung announced record 9.5 trillion won ($8.3 billion) in operating profit for the April-June quarter but analysts had expected more than 10 trillion won, resulting in a 3% drop in its share price, after a 17% drop from its peak since mid-March.
"It’s weaker than expected. Slow mobile sales, combined with hefty marketing costs for the flagship Galaxy S4 smartphones, undermined the bottom line," Jeff Kim, of Hyundai Securities, told AFP.
Samsung’s mobile business accounted for 74 percent of its total operating profit in the first quarter.
"Is Samsung’s smartphone story now over? Not quite yet. It’s growth is indeed slowing due largely to disappointing sales of the S4," said Jung Sang-jin, a fund manager at Dongbu Asset Management, which owns Samsung shares.
Samsung’s handset shipments are seen rising only 4 percent to 8 percent in the second quarter from the previous quarter, and margins are also being squeezed, as consumers in countries like China opt for stripped-down cheaper devices.
Could part of Samsung’s disappointing growth in part be because Windows Phone handsets, the fastest growing smartphone segment, are taking away some of their margins, or is Samsung’s performance a precursor of what we can expect from Nokia’s earnings report on the 18th July, with a rapidly fading feature phone business and below expectations smartphone growth? Let us know below.