Samsung’s Q2 profits dip, falling short of analyst expectations by nearly $1 billion

July 9, 2014

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Samsung’s Q2 earnings are in, and once again, they’ve fallen short of analyst expectations. Samsung plans to bring in about 7.2 trillion won, or $7.1 billion, which is quite a bit lower than the expected 8.1 trillion won ($8 billion). That’s a 24% decrease year-over-year for Samsung. Now, making over $7 billion in profit is still great for any company, but it’s still about $1 billion away from what the company was expected to bring in from the quarter.

Samsung claims that the main reason for the missed expectations was increased competition in the budget market in countries like Europe and China, but there were other contributing factors to the decline, including phablet devices eating into the sales of 7 and 8 inch tablets. Plus, Samsung had to ramp up their marketing and advertising budget to stay competitive in the high-end market thanks to serious competition from HTC, LG, and the like.

It’s not all doom and gloom, though, as Samsung expects a stronger Q3 thanks to new devices and service. The Note 4 may launch in September and just might be the trick to get Samsung back on track.

While Samsung is still making plenty of money to stay afloat, the company is going to have to look towards other markets to continue growing and keeping shareholders happy. The wearable market, including watches, smartglasses, and VR headsets, is likely where consumers are starting to look for their new devices, so we’ll have to wait and see if Samsung can capture those potential customers like they did with smartphones.

source:

Samsung

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