Samsung’s net profit for second quarter down 8%

At a media event in New York on August 13, Samsung is expected to debut the Galaxy Note 5, its latest phablet, and possibly a version of the S6 Edge, the Galaxy S6 Edge Plus, with a bigger screen. This was due in large part to a rise in the South Korean won, which made exported products much more expensive in Europe and the U.S.

Total operating profit declined 4 percent from last year to 6.90 trillion won, with operating margin expanding 50 basis points to 14.2 percent. Samsung attributes this to declining shipments of older mid- and low-range models, marketing expenditures and failing to meet the market demand for its Galaxy S6 Edge. It’s yet another quarter of shrinking profits which fell 8 per cent year-on-year, forcing the company to accede that sales of Galaxy S6 phones had been “quite marginal”.

This is nearly the same situation that the company found itself in during the first quarter of this year.

An average forecast from a Thomson Reuters I/B/E/S survey of 48 analysts compiled prior to Thursday’s results tips this year’s profit at 27.3 trillion won though several have lowered their expectations in recent months.

Samsung shares were down 3.5 percent as of 0426 GMT, near their lowest since November 2014.

In April, the company had hoped that its Galaxy S6 and S6 Edge phones would be the ray of hope that the company needed to recover from its downturn.

At the beginning of July, Samsung revealed that it was expecting a few deeply underwhelming second quarter results, and so it has proved. At present, the Galaxy S6 (32 GB) costs Rs 39,850 while the curve-screened S6 Edge (32 GB) is listed for Rs 47,949 on e-commerce site Amazon.

At the high end, it has lost significant ground to Apple, which dominates with its iPhone line. Samsung said it expects growth in the smartphone market to slow in the second half of the year, with only a small sequential increase in sales in Q3.

Its smartphone slump could spill over to other component businesses, including chips, said Lee Seung Woo, an analyst at IBK Securities Co.in Seoul. It was up 15.36 percent from the prior quarter, but down 4.03 percent from a year earlier.