Samsung misses revenue and profit forecasts

Hit by increased competition in the smartphone market, Samsung missed profit and revenue forecasts.

In the three months to June, the South Korean electronics giant's operating profit dropped to 6.9tn won (£3.8bn, €5.4bn, $5.9bn), from 7.2tn won a year ago.

That was in line with the earnings guidance Samsung issued earlier this month but fell short of analyst expectations for a 7.2tn won return.

Net income slid to 5.8tn won, from 6.3tn won, making it the fifth straight quarter of decline in net profit.

Revenue also slumped to 48.5tn won, from 52.4tn won a year ago, well below forecasts of 53.4tn won.

Shares in Samsung were trading 2.8% lower after the announcement.

Revenue from the company's mobile division dropped to 25.5tn won, from 27.5tn won, amid saturation in the smartphone market and increased competition from rival phone-makers, but chip sales jumped to 11.3tn won, from 9.8tn won.

The company also miscalculated demand for its curved-screen Galaxy S6 Edge phones, leading to a supply shortage that ate into profits.

"Samsung's new S6 helped fatten up component profits but it failed to meet the golden timing of demand for the device because of the supply issue," IBK Securities analyst Lee Seung-Woo told Bloomberg.

"Sales of S6 devices are expected to shrink further in the third quarter and its smartphone slump could spill over to other component businesses, including chips."

Samsung has brought forward the launch date of its new smartphone and tablet models to 13 August in a bid to get a jump on rival Apple, which traditionally unveils new devices in September.

The Korean giant is widely expected to unveil a new Galaxy Note tablet and a larger S6 Edge smartphone at its "Galaxy Unpacked" event in New York next month.