Samsung’s CFO Lee Sang-hoon warned Wednesday that the company’s Q2’14 earnings won’t be as good as it initially expected, according to Bloomberg News. Samsung’s operating profits estimates are $8.4 billion for for the second quarter of this year, compared to $10.2 billion from the same period last year.
“It doesn’t look too good,” Sang-hoon told a group of reporters at the company’s Seocho headquarters, when he was asked about Q2 results.
Reports indicate that a high competitive environment from local players in emerging markets where Samsung faces stiff competition from the likes of China’s Huawei, ZTE, and Xiaomi, and India’s Micromax and Karbonn, as well a deterioration in sales of its Galaxy devices, which keep getting squeezed by Apple (AAPL) iPhones in the high-end market, are the two primary problematic factors for the co.’s Q2 expected performance. KTB Investment & Securities’s Jin Sung Hae had this to say:
“The main reason behind the lowered earnings estimate largely stemmed from weak smartphone sales. Strengthening competitiveness of local players in emerging markets are hurting sales of Samsung’s lower-end smartphones.”
Samsung’s smartphone shipments shrunk to 78 million units in the three months ending June from 87.5 million units in the previous quarter, according to estimates from IBK Securities. This would represent a 12.5% decline from a year earlier.
Samsung’s Q2 earnings were expected to be released at the end of July, but the company may report preliminary earnings for the second quarter as soon as next week.