Seventh profit drop in a row for Samsung

Seventh profit drop in a row for Samsung

The Galaxy S6 is not performing as well as Samsung had hoped, which means the South Korean company will now face another quarterly profit drop, demonstrated by its profit alert.

"Misjudgment"

The Korean electronics group positioned its new flagship smartphone, the Galaxy S6, as the iPhone challenger, but it is not as popular as the group had anticipated. On the other hand, the S6 Edge is a hit thanks to its screen with curved edges, but Samsung underestimated the demand for this particular version.

 

According to the Wall Street Journal, Samsung had organized its production lines to create one Edge version for every 4 'classic' S6 models. In reality, demand for either smartphone is at an equal level, meaning that the S6 Edge production cannot keep up with demand.

 

Turnover down 8 %, profit down 4 %

In its quarterly update, the Samsung board explains it expects a 6,900 billion won (5.5 billion euro) operational profit for the quarter, which is 15 % better than the first quarter, but still down 4.03 % compared to the same quarter last year. That means the company will face a seventh straight quarterly profit drop.

 

Turnover is following the same trend: it reached 48,000 billion won (38.56 billion euro) in the April-June period, which is up 2 % compared to the first quarter, but down 8 % compared to the same quarter in 2014. The full numbers will not be released until later this month.

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