Samsung releases a disappointing first estimate of its financial results for the second quarter 2014

After HTC is Samsung’s turn to release financial results for the second quarter of the year. If profits respond well present, they are however significantly lower than last year.

Samsung has released a preliminary estimate of its financial results for the second quarter of 2014. If the Korean giant’s accounts are in the green and dream would any other business, comparing with the results of the last year concerned shareholders and financial analysts. In the second quarter of the year, Samsung achieved a turnover estimated at 52 000 billion won, or about 37.79 billion euros, a decline of 9.5% compared to the second quarter of last year. The operating profit amounts meanwhile to about 7200 billion won, or about € 5.23 billion, down 25% compared to the same period last year. By comparison, in the second quarter of 2013, Samsung had achieved a turnover of about 57,460 trillion won (41.76 billion euros) and a profit of 9,530 billion won (6.92 billion euros). The second quarter 2014 has moreover revealed worse than the first three months of the year.

This sharp decline in financial results is not without worrying Samsung shareholders. And the Korean manufacturer has supported (for the first time in its history) these first estimates of an informative note to its shareholders and investors. The latter explains why these four points results decreased.

Samsung is justified, a first

First, the Korean Won is currently at its highest level in six years against the dollar and the euro. This is a brake on exports and it had to curb the financial results of Samsung in emerging markets. Second reason, the smartphone market is not as bright as before. Market growth slowed global level and Samsung faces competition from increasingly strong Chinese markets (who said Xioami?) And European (where Chinese manufacturers are gradually beginning to impose on market entry and midrange). In China, particularly, Samsung indicates that the second quarter is traditionally the weakest season in terms of sales. Added to this is that on that market, Chinese consumers have shifted 3G phones and focus more on 4G smartphones. Result of all this, Samsung ended up with more inventory than expected on the arm and put spending more money than usual in communication and marketing to sell. Last point, the tablet market is ruled by Samsung as apathetic. The turnover of these products is longer for consumers and the arrival of increasingly massive smartphone with a screen with a diagonal of 5 to 6 inches had an impact on sales of tablets and 7 8 inches.

Samsung, however, wants to reassuring the end of the year and expects a third quarter better than one “with the commercialization of new smartphones.” We think of the output, most likely by year’s end, the Galaxy Note 4.