Samsung's estimated profit for Q2 at $7 billion; far below market expectationsUpdated: 2014-07-09 03:33:01 KST
Industry insiders in Seoul are calling it an 'earnings shock'.
Samsung Electronics' second quarter earnings guidance stands at 7.2 trillion won, or just above 7 billion U.S. dollars falling 15 percent from the previous quarter and down a whopping 25 percent from the same period last year.
The company attributed the lower-than-expected operating profit to a slowdown in the growth of the global smartphone market and a strong Korean currency.
"Samsung had hard time in high-end smartphone segment because Galaxy S5 did not do well. Second, Samsung did not focus on mid and low-end smartphone market because of price down pressure from Chinese smartphone competitors."
Experts add if Samsung fails to beat off competition from Apple and Chinese manufacturers such as Xiaomi and Lenovo by the end of the year, the results will take a toll on the Korean economy as well given that Samsung, last year, took up nearly 50 percent of the combined net profit generated by all listed companies in Korea.
"Samsung says the far-from-impressive numbers are hardly related to its ill chairman Lee Kun-hee but with the second-quarter-profit hitting a two-year-low, investors are likely to put more pressure on the tech giant's management.
Laah Hyun-kyung, Arirang News."
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