Samsung Electronics, 2Q 2014 Declining Profit: Is the Technology Giant in Trouble?

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3Q 2014 | IN-1019583

Samsung Announces 2Q Earning Guidance

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On July 8, 2014, Samsung announced its 2Q 2014 earning guidance. Red flags rose as the company announced its second straight decline in profit. Consolidating sales were KRW₩52 trillion (US$51.3 billion) and consolidated operating profit was KRW₩7.2 trillion (US$7.1 billion). Year-over-year, the company is reporting a 10% decline in sales and a 3% decline quarter-over-quarter. For operating profit, Samsung is predicting the company will experience a 24% decline due to the decrease in smartphone and tablet sales. The unexpected drop draws significant attention to the technology giant, especially with the launch of the company's flagship device, the Galaxy S5. So far this year, the company has failed to meet analysts' expectations, and it is facing much scrutiny as emerging markets become a key focus and the market gets flooded with low-end devices.

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