Samsung earns $6.1 billion, shares plunge
SEOUL, South Korea (AP) — Samsung earned $6.1 billion last quarter but investors were dissatisfied, sending its share price down 4 percent. The panoply of numbers in its earnings report for the April-June quarter show why.
— MONEY SPINNER MALFUNCTIONS
Last quarter Samsung sold 18 million fewer handsets than 113 million in the first three months of the year. Smartphones and other handsets have previously contributed about 70 percent of Samsung’s profits. This quarter it fell to 60 percent.
— TABLETS TRAIL
Samsung sold 8 million of its Galaxy tablets, down from 13 million in the first quarter. Like other tablet makers, Samsung is finding it hard work convincing consumers to constantly upgrade to the latest model.
— PANELS PLUS
A bright spot, with Samsung increasing its shipments of flat panel TVs to 12 million from 11 million in the previous quarter. But the business isn’t big enough to offset declining smartphone sales.
— CURRENCY QUIRK
A stronger Korean currency meant nearly $500 million of operating profit was lost when foreign earnings were translated into won.
— DULL DIVIDEND
No sweetener for shareholders, with the interim dividend unchanged at 500 won (49 cents) per share.
— UNCERTAIN OUTLOOK
Samsung is not sure smarpthone profit will recover this quarter as cheaper models from companies such as Huawei are increasingly popular in developing countries.
— BIG SPENDER
Samsung has hefty investment plans for its semiconductor business which needs billions of dollars each year to upgrade facilities. It also must pick up the slack from smartphones. More than half of the company’s 24 trillion won ($23.4 billion) of capital spending this year will be plowed into the chip operations.
— THE BOTTOM LINE
Net profit of 6.3 trillion won ($6.1 billion) was down a hefty 20 percent from a year earlier. Sales drooped 9 percent to 52.4 trillion won ($51 billion).