Samsung earnings miss estimates
Samsung Electronics Co., the worlds biggest smartphone maker, posted second-quarter earnings that missed analyst estimates as sales of its flagship Galaxy S 4 handset fell short of analyst expectations.
Operating profit rose to about 9.5 trillion won ($8.3 billion) in the three months that ended in June from 6.5 trillion won a year earlier, South Korea-based Samsung said in a preliminary earnings release. That compares with the 10-trillion-won average of 34 analyst estimates compiled by Bloomberg.
The S 4 was released in April with a bigger screen and motion-detecting software to help Samsung reclaim the top spot in the U.S. market from Apple Inc.s iPhone and boost growth at its biggest source of earnings. The stock slumped 13% last month as at least 15 analysts cut earnings estimates amid concern the high-end smartphone market is nearing saturation.
Expectations over the Galaxy S 4 device was way too high, Park Hyun, a Seoul-based analyst at Tong Yang Securities, said before the earnings release. High expectation came with high disappointment.
Sales were about 57 trillion won in the June quarter compared with 47.6 trillion won a year earlier, the company said. That compares with the 58.6-trillion-won average of 38 estimates.
Last month, Samsung lost $25.3 billion in market capitalization, more than the value of competitor Sony Corp., as analysts scaled back expectations for the S 4.
Samsung didnt provide net income figures or a breakdown of division earnings with audited results due to be reported later this month.
Apple became the largest smartphone vendor in the U.S. in the fourth quarter of last year, Strategy Analytics said in February.
Operating earnings at the telecommunications unit probably rose to a record 6.9 trillion won in the quarter, according to the median estimate of six analysts surveyed by Bloomberg News. Sales may have gained 54% to 36 trillion won.
In the absence of a new handset from Apple so far this year, Samsung is counting on the S 4 to appeal to high-end shoppers. The company, which unveiled the S 4 at New Yorks Radio City Music Hall, said May 23 it sold 10 million units within the first month — about half the time it took the S III to reach that mark. The new phone features a 5-inch screen and 13-megapixel camera.
Scaled-down versions of the Galaxy and other models are being released to protect market share from Chinese rivals selling smartphones for $100. Samsung shipped 69.4 million smartphones in the first quarter, Strategy Analytics said in April.
Shares of Samsung, which sells nearly one of every three mobile phones, dropped 13% in June as analysts at JPMorgan Chase & Co. and Morgan Stanley lowered sales estimates for the S 4 by as much as 25%. The slide cut the Korean companys market value by more than $25 billion.
Apple is suffering from iPhone fatigue, while Samsung is suffering from Galaxy fatigue, Neil Mawston, executive director of Strategy Analytics, said in an e-mail before the release.
Copyright © 2013, Los Angeles Times Comments1 « Previous Story More Business News Next Story » Summer is scam season Southland hot dog and sausage makers cook up ways to prosper Comments (1)Add / View comments | Discussion FAQ Sawab King at 6:42 PM July 04, 2013
Complete idiots. Releasing a flagship phone every year is just asking for trouble specially when the old one has so many bugs.