Samsung second-quarter earnings 'not that good,' CFO says
Increased competition in key markets is hurting Samsung's overall financial performance, according to a new report.
Samsung's chief financial officer warned that the South Korean electronics giant's second-quarter financial results may be disappointing.
Speaking to reporters on his way to an internal meeting, Samsung CFO Lee Sang Hoon said that Samsung Electronics' second-quarter earnings are "not that good." He didn't provide any hard figures or additional insight to support his comments, but it was enough to shake investors. The company's shares, which are traded in Korea, fell 1.9 percent at the end of trading on Wednesday.
Analysts expect Samsung to post an operating profit of 8.4 trillion Korean won ($8.2 billion) for the three months ending June, according to Bloomberg.
Samsung's mobile business faces increased pressure from local and global competitors, such as LG and HTC, and it has been forced to reduce margins on its flagship handsets to be more competitive. Samsung's mobile division, which typically accounts for two-thirds of the company's revenue, recorded a first-quarter operating profit of 6.43 trillion won ($6.2 billion), a 17 percent increase from the previous quarter but a slight decline from a year ago.
Samsung announced last month that 11 million Galaxy S5 units were sold in its first month on store shelves, beating the 10 million Galaxy S4 units it sold during the same period last year. IBK Securities estimates that Samsung's smartphone shipments fell to 78 million units in the second quarter from 87.5 million units the previous quarter, according to Bloomberg.
Samsung has reported two consecutive quarters of profit decline. For the fourth quarter of 2013, the company reported a net profit of $6.8 billion, down 11 percent compared to the prior quarter. Samsung reported a first-quarter profit of $8.2 billion, a 3.3 percent decline from the year-ago period.
Samsung is expected to announce its preliminary findings on the second quarter next week at the earliest. It won't announce its final numbers until they've been fully compiled and reviewed.
CNET has contacted Samsung for comment. We will update this story when we have more information.
(Via Bloomberg)