Samsung’s Earnings Fall Short of Expectations

Samsung, which leads the smartphone industry as the biggest developer, has released its second-quarter earnings recently.

While the company has enjoyed a rise in operation profits, from 6.5 trillion Won last year, to 9.5 trillion Won since last June, it has apparently failed to meet its 10-million Won average, a figure that has been predicted by at least 34 analysts.

Shares also fell to 2.4 percent before trading at 1.4 percent this year, while stocks declined to 15 percent.

According to one analyst from KB Investment & Securities, “The market was initially concerned about third and the fourth quarter results, but today’s news raises questions if the earnings are already in bad shape.’’

In a previous month, Samsung was reported to have lost a $US25.3 billion capital, when analysts adjusted their expectations for the S4.

Samsung’s Galaxy S4 was released in April this year, in order to compete with Apple’s iPhone 5. While Apple has not released any new handset so far, Samsung is banking on high-end consumers for more profits.

But in May, Samsung said that some 10 million S4 units have already been sold in just its first month of release. In addition to this, scaled down Galaxy versions, as well as other Samsung models, are set for release at more affordable prices in the coming months.

This move is Samsung’s way of boosting demand from consumers and also solidifying its lead against its Chinese rivals, who are capable of developing and selling smartphones below $US100.

One analyst, however said that because of this, Samsung is experiencing Galaxy fatigue, similar to Apple’s iPhone fatigue.