Samsung sulks as profits slump

sulkingSamsung reported its worst quarterly profit in two years and moaned about uncertain earnings prospects for its key handset business.

The fact it gave such a doomed profits prophecy and kept its interim dividend unchanged from last year, put the shares of the outfit on track for their worst fall in nearly eight months.

Samsung expects July-September handset shipments to pick up by 10 percent from the previous quarter and said it planned to release a new premium smartphone employing a new design and material.

The outfit is suffering from its low end being squeezed from Chinese rivals like Xiaomi and has promised price cuts.

Those plans were pretty much want everyone thought it would do Samsung remained downbeat about its third-quarter prospects, with its mobile division expecting a decline in average sales price in the current quarter from the April-June period.

Senior Vice President Kim Hyun-joon said that considering intensifying competition of price and specifications as well as the release of new competing models, it is difficult to expect earnings to improve from the second quarter.

For April-June, Samsung said operating profit fell 24.6 percent annually to $7.03 billion, matching its guidance. It was the third straight quarter of profit decline and its weakest result since the second quarter of 2012.

Profit for the mobile division fell to about $4.42 billion from $6.28 billion a year ago.

Samsung’s mobile division executives returned a quarter of their first-half bonuses and have downgraded to economy seats for shorter flights.

Researcher IDC warned that Samsung’s second-quarter global smartphone market share slipped to 25.2 percent from 32.3 percent a year ago.

Samsung’s guidance on its memory business was bullish, tipping its 2014 shipment growth for both DRAM and NAND memory chips to outpace the broader market.