News Column

Samsung posts 20% fall in second quarter profit

July 31, 2014



Samsung Electronics on Thursday reported a near 20 percent decline in second quarter net profit, due to increased competition from cheap Chinese devices in the key smartphone sector and a surging Korean won.

The South Korean electronics giant posted a net profit of 6.25 trillion won ($6.1 billion) its lowest figure for two years and down 19.6 percent from the same quarter last year.

Operating profit stood at 7.19 trillion won, down 24.6 percent from a year ago, while sales tumbled 8.9 percent to 52.35 trillion won.

The second quarter was affected by several factors including the slow global sales of smartphones and tablets and escalating marketing expenditure to reduce inventory," the company said in its earnings report.

The appreciation of the Korean currency also chipped away at this quarter's operating profits, which amounted to about 500 billion won in missed revenues prompted by the foreign exchange market," it said, adding that the second half of 2014 would remain a challenge".

The won is currently running at six-year highs against the dollar, impacting South Korea's export-driven economy.

Samsung had expressed cautious optimism about a more positive third quarter with the release of its new smart phone line-up and a much lower marketing spend compared to the second quarter.

However, the next quarter will also see the competition heat up with the expected launch of the iPhone 6 by chief high-end rival Apple.


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Source: Daily Pakistan Today


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