Samsung’s Q2 profits miss expectations, raise concerns that smartphone business has peaked

King-Samsung

We’ve been hearing chatter about less than stellar Galaxy S4 sales for some time now, and now word of quarterly profits that missed expectations are raising more concerns about Samsung. Some are concluding that the Korean company’s smartphone business has peaked after bringing in $8.3 billion in operating profit during the second quarter of 2013. ONLY $8.3 BILLION.

Samsung typically meets or exceeds industry forecasts, so a rare miss has sent stock down a further 3 percent. In all, the price of Samsung stock has dropped 17 percent since the beginning of June. Analysts believe that Samsung needs to diversify to reverse their fortunes amid concerns that mobile, which hauls in about 70 percent of the company’s total profit, won’t be quite the same commodity moving forward.

Of course, it’s not all doom and gloom.The $8.3 billion is still 47 percent more than what the company earned in the same quarter last year. It’s a record-setting number. Forecasts for the second half of the year are trending upward and could lead to some of the biggest quarters in Samsung’s history. So, no, Samsung is not the next HTC. Let’s not all freak out at once now.

[via Reuters]

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  • Robabobbob

    Poor Samsung, what will they do with that paltry 8.3 Billion? I think we should have a whip round for the directors asap!

    • Guest

      lol ikr, even when not hitting their “mark” they still had the best sales ever right? lol which still crushes everyone. Im sick of all these sentational talks. Samsung is on top because they create awesome handsets whether you like plastic or not. ( i dont mind but carbon fiber sounds better hehe)

      • simpleas

        not sure why my post is coming out as guests lol

    • Janice S. Roberts

      what Nancy implied I am alarmed that any one able to profit $6360 in four weeks on the internet. did you see this site w­w­w.K­E­P­2.c­o­m

  • Robert Day

    Smartphone sales plateau? No. Too many devices too fast. I got my Galaxy S2 when it was new. I’m still under contract. I might be up for an upgrade in time fire the S5.

    • Keith

      Yeah it will plateau a bit, the smartphone area was expanding fast because a lot of people were still using feature phones and others instead of smartphones. It gets to a point where people will only replace their old smartphone, which will mean less sales. There will still be a lot sold, but not as much.

      • Drew M

        With just over a billion smartphone users in the world, we’re not even halfway there. Emerging markets like India probably won’t grow as fast, but the number of smartphone subscribers will continue to expand even as the rate of growth declines.

  • Blkegk

    the HTC one put a dent in Samsung’s sales. put front facing speakers on the S5 and records will be broke.

    • Keith

      I wish every phone had front facing speakers….

    • Patrickl69

      Did you understand the part where it says that Samsung had record sales? Just not as much “record breaking” as the pundits had anticipated.

      So records are already broken. The Galaxy S4 sells almost twice as fast as the S3 did.

      • Blkegk

        I meant new records will be broke. but thanks for clarifying.

  • blue720

    Samsung is doing the same exact thing that HTC did by flooding the market with the Galaxy line. It backfired for HTC and it will do the same for Samsung.

  • taz89

    Analyst or whoever that are disappointed are a joke.. Apple and sauna pull in record quarters yet the money people are never happy.. They can’t expect growth to be humongouseevery single time.. Even though Samsung made nearly 50% more than the same time last year it’s not good enough lol what a joke. They worried Samsung of all companies not diversified lol they probably the most diversified company out there.

    • godrilla

      true I bet ppl don’t even know that Samsung makes counter tops from corian material that costs more than granite.

    • master94

      lol all those Galaxy models. If that’s not diverse I dont know what is. And 8 billion dollar profits. Clearly signs that a company isn’t doing well /s

  • substring

    All those so-called industry analysts are all stupid. They should either be fired or need to find better things to occupy their time. You cannot expect a company to beat expectation every single quarter, Even Apple cannot do that. It does not mean the company is in trouble. The world will be in serious trouble if we rely on these stupid analysts.

    • simpleas

      lol ikr, even when not hitting their “mark” they still had the best sales ever right? lol which still crushes everyone. Im sick of all these sentational talks. Samsung is on top because they create awesome handsets whether you like plastic or not. ( i dont mind but carbon fiber sounds better hehe) Its Samsung who made it possible for Apple to become what they are. Samsung didn’t need Apple, Apple needed Samsung. Samung was doing fine. They always even from the early 90′s had the best mobile phones. [whiile people in the states were tinkering with Polyphonic ringtones, korean were using their DMB satelite tv and mp3 ringtons on their mobile phones. And their mobile division is dwarfed by their other MAIN divisions. Samsung is fine.

      • bluevoodo

        whoa! Easy there tiger wouldnt want you going on a rant or something.

  • ReverseRoxas

    How the heck is anyone supposed to buy a new Samsung OR HTC phone when most people are in a fresh contract and cannot/will not upgrade right now!? These analysts.,.

    • Patrickl69

      Why is it that everybody always is stuck in a contract?

      More and more people buy smartphones and contracts do end. People who bought an S2 will be done now. Also, outside of the US contracts tend to be for a year.

      If people use contracts at all. I don’t. Much cheaper to buy the phone yourself and go SIM-only. Pay 15 euro a month instead of 50 and have the freedom to switch whenever you want..

      • OptimusKLP

        Amen to that mate.

      • Drew M

        Well, maybe there are enough people like my boss who are constantly breaking their phones. He’s on his third GS3. This year. I kid you not.

  • 4beaches

    Analysts only exist to assist the fat cats in making big bucks by doing nothing other than playing with stock value. Whatever an analyst says is not the gospel but it has a huge effect on stocks. They can obviously be wrong, or if they want the stock price to go down they can maybe just fudge the numbers a little….

  • NinjaKombat

    Until phone companies change their 2 year contract policy, this is always going to affect when people are going to upgrade their phones. I got the GS3 last year and I want the GS4 so bad, but i’m not going to fork out $600. When my contract is over, I will upgrade to the GS5, and I’m sure a few million people out there are on the same boat.

    • Eric Junior

      I went from GS2 to GS4 for the same reason.

    • GerStud101

      But didnt the GS2 sell like hotcakes as well? So there should be a whole market of people who skipped the GS3 and upgraded to the GS4, right?

      Personally, I went Captivate -> S3 -> S5 (presumably coming out next summer); but I know a lot of people didn’t jump on the galaxy bandwagon until the S2.

  • barondebxl

    Samsung is just fine. The galaxy S series can take care of the first half of the year, the note series can take care of the second half.

  • pleasegetreal

    Yes, you can and should expect a company to beat estimates each and every quarter. That is called managing the Street’s expectations. If they miss the quarter, it means that the business has done worse than the management’s lowest reasonable case scenario. In that situation, the stock should be punished.

    • taz89

      samsung made nearly 50% more profit than the same time last year…maybe the st just like with apple just expect too much..you cant expect huge growth every quater and nearly 50% growth over previous year in any other business would have seen there shares go up…its because its samsung and apple the st expect miracles every single time yet when companies like google make much less profit or amazon who barely ever make huge profit they stock goes up…it seems like the st just expect the impossible sometimes from some companies. RECORD profit not good enough lol and samsung not diversified enough, what exactly doesnt samsung make they probably the most diversified company in the world

  • Hakim Leveille

    Wanna see Samsung demolish expectations?
    Two words: flexible display

    • OMFCody

      Or perhaps the Rise of LG will happen with their flexible display.

  • zifnab

    But… freak… out… only 8.3 Billion? Geez I can’t even get a stick of gum for 8 billion these days.