South Korea's Samsung Electronics Co., world's largest mobile phone manufacturer, has reduced second-quarter net profit by 19.6%, the fall happened the first time in nearly three years (since the third quarter of 2011). According to a press release, in April-June net profit was 6.25 trillion won ($6.1 billion), compared with 7.8 trillion won the same period last year.
Samsung reduced net profit for the 1st time in three years
Operating profit decreased by 24.6% – to 7.19 trillion won. Revenues decreased by 8.9% and amounted to 52.35 trillion won. Operating profit of the mobile devices in the second quarter decreased by 30% – to 4.4 trillion won from 6.3 trillion won.
Weakening demand for the products in China and Europe, resulting in increased product inventories in warehouses, as well as the strengthening of the South Korean won, according to MarketWatch were the reasons of Samsung Electronics weak financial performance. Analysts believe that Samsung has almost no choice and the company will lower prices for smartphones as consumers prefer to buy cheap Chinese brands of smartphones and see no reason to pay several times for the Galaxy.
According to IDC research firm, despite the beginning of the new smartphone Galaxy S5 sales, Samsung delivery in April-June amounted to only 74.3 million mobile devices, while the market was expecting about 90 million. Samsung quotes during trading on Thursday fell by 3.9%.
Samsung – one of the largest IT-companies in the world. It is – is an international manufacturer of electronics: semiconductors, telecommunications equipment, liquid crystal displays, memory chips, monitors and mobile phones. Samsung is a leader of Android-based smartphones market and is a key supplier of displays for different companies.